Europe midday: Shares lower as Eurozone inflation spikes
European shares were on the slide at the end of the week as eurozone inflation hit a new record in December.
The pan-European Stoxx 600 was down 0.18%. Eurozone inflation rose unexpectedly in December driven by surging energy prices and putting the European Central Bank under more pressure to act.
Consumer prices in the single currency region rose by 5% in the year to December, up from 4.9% in November - a new record high and well above forecasts of 4.7%.
Energy prices drove the cost of living higher, rising by 26% over the last year as oil and gas prices spiked.
Investors were also eyeing US weekly payroll data later in the day.
“Last November’s payrolls report turned out to be a rather lacklustre affair, however it was still good enough for the Federal Reserve to accelerate the winding back of its taper program, even though the headline number was disappointing, coming in at 210k jobs, against an expectation of 550k,” said CMC markets analyst Michael Hewson.
“With Omicron spreading across the US like wildfire in December, and weekly jobless claims starting to edge higher from their lowest levels in 1969, there is a risk that this week’s report could similarly disappoint, although given how strong this weeks ADP report turned out to be, today’s number is a difficult call.”
“It ought to be a good number given that continuing claims have fallen back to the levels they were pre-pandemic at around 1.7m in recent weeks, while the employment component in the manufacturing ISM this week was decent.
In equity news, Deutsche Bank shares rose more than 2% after its finance director told the Handelsblatt newspaper the firm was confident it would hit a key profitability target this year.
Chipmaker STMicroelectronics rose 5% after preliminary fourth-quarter revenue came in slightly above the outlook given at the end of October amid a global supply crunch.