On Thursday, European equities were flat as drops in consumer staples and luxury sectors overshadowed advances in real estate and financials, particularly UBS, as a slew of economic data painted a mixed image of the eurozone.
The pan-European STOXX 600 (.STOXX) fell 0.2% after rising as much as 0.5% intraday.
Recent advances have helped the benchmark avoid its worst monthly performance of the year, but it is still on track to lose over 3%.
UBS Group (UBSG.S) rose 6.1%, reaching its highest level since 2008, on a comprehensive plan to cut over $10 billion in expenditures, axing 3,000 employees in Switzerland after acquiring its ailing rival Credit Suisse.
The broader financial services index (.SXFP) increased 1.5% to a one-month high.
Rate-sensitive real estate equities (.SX86P) rose 1.6%, while euro zone bond rates fell to a one-week low as data on inflation in the eurozone displayed a mixed picture.
This month, Eurozone inflation stayed stable, while underlying price growth decreased as expected but remained over the ECB’s target, despite previous data on business activity pointing to a bleak economic picture.
“We may have passed the peak in core services inflation as pressure from tourism-related sectors subsides and favourable base effects from travel subsidies take effect,” said Gurpreet Gill, global fixed income macro strategist at Goldman Sachs Asset Management.
“If policymakers decide against raising rates for the tenth time in a row in September, whether they raise rates to 4% in October will be determined by the trajectory of inflation between now and then.”
While raising rates in July, ECB policymakers put a September hike on the table, while several believed that further move would be deemed unnecessary once new economic predictions were announced, according to meeting records.
For the first time in almost a year, traders are unsure if the Fed will raise interest rates in September.
Separate estimates from Germany revealed that August unemployment climbed more than expected, while July retail sales decreased unexpectedly.
However, Germany’s DAX (. GDAXI) climbed 0.4%, surpassing key regional counterparts.
Luxury (. STXLUXP) was the hardest hit, down 1.3%.
Pernod Ricard (PERP.PA), the parent company of Mumm champagne and Absolut vodka, fell 6.7% after announcing that sales in China and the United States would fall in the first quarter ended September 30, leading to a 1% dip in the food and beverage sector (. SX3P).
Glencore (GLEN.L) fell 2.5% after the Financial Times revealed that dozens of asset managers had accused the miner of misrepresenting in previous share prospectuses.
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