European stocks rise; quarterly earnings, German inflation data in focus

Investing.com - European stock markets rose Monday, as investors digested a slew of significant corporate earnings ahead of the release of key German inflation data.

At 03:15 ET (07:15 GMT), the DAX index in Germany traded 0.4% higher, the CAC 40 in France traded 0.3% higher and the FTSE 100 in the U.K. climbed 0.4%.

European earnings season continues

European stock markets traded higher Monday, with sentiment boosted by stronger-than-expected earnings from U.S. tech titans Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL), which triggered a rally on Wall Street on Friday.

There are more U.S. earnings to study this week from the "Magnificent Seven" tech megacaps, with Amazon (NASDAQ:AMZN) due on Tuesday, and Apple (NASDAQ:AAPL), on Thursday.

The quarterly earnings season continues apace in Europe as well.

Vivendi (OTC:VIVHY) stock fell 0.9% despite the French media group saying its first-quarter revenue rose strongly, boosted by strong growth at its three core businesses, Canal+ Group, Lagardere and Havas.

The group added that a feasibility study for its planned split into four separate businesses was progressing.

Philips (AS:PHG) stock rose 1.7% after the Dutch medical devices maker delivered first-quarter results largely in line with expectations, but also said it has reached a $1.1 billion settlement in the U.S. related to its Respironics ventilators, and backed its full-year guidance.

BBVA (BME:BBVA) stock rose 1.4% after the Spanish lender’s first-quarter net profit beat earnings forecasts thanks to a rise in lending income in Mexico and Spain, a trend it expects to improve this year in its home country.

Deutsche Bank (ETR:DBKGn) stock fell 3.5% after the news that a long-running lawsuit resulting from its acquisition of Postbank could cost Germany's largest lender up to 1.3 billion euros ($1.39 billion).

German inflation data in spotlight

In economic news, Spanish consumer prices rose 3.3% on an annual basis in April, a monthly increase of 0.7%

This remained above the European Central Bank’s 2% medium-term inflation target, but more attention will be paid to the German state CPI data, due later in the session, given the importance of the German economy within the eurozone.

The European Central Bank has previously signaled that it cut its deposit rate in June,  and while policymakers have made it clear there will likely be multiple cuts this year, they have been less clear on exactly how many.

That said, a June cut is still likely to be several months before the U.S. Federal Reserve decides to ease its monetary policy, especially after Friday’s PCE price index data - the Fed’s preferred inflation gauge - came in hotter than expected for March. 

The U.S. central bank meets later this week, and is expected to keep rates steady and potentially offer a hawkish outlook, given recent stickiness in U.S. inflation.

Crude falls ahead of Israel-Hamas peace talks

Oil prices fell sharply Monday as peace talks between Israel and Hamas eased concerns of a wider conflict in the Middle East,  as well as the potential for a disruption to supplies from the vital region.

By 03:15 ET, the U.S. crude futures traded 0.9% lower at $83.08 a barrel, while the Brent contract dropped 0.9% to $87.38 a barrel.

A Hamas delegation will visit Cairo on Monday for talks aimed at securing a ceasefire, a Hamas official told Reuters on Sunday, with the group expected to respond to Israel’s latest Gaza phased truce proposal delivered on Saturday.

Additionally, gold futures fell 0.2% to $2,342.20/oz, while EUR/USD traded 0.2% higher at 1.0715.