European markets: US inflation data, higher taxes, China regulation – CNBC

LONDON — European markets pulled back slightly on Tuesday morning as global investors awaited inflation data from the U.S., which could inform the Federal Reserve’s timing for tapering its monetary stimulus.

The pan-European Stoxx 600 slid 0.25% in early trade, with mining stocks dropping 1.8% to lead losses as all sectors fell into negative territory except autos, which added 0.7%.

U.S. consumer price index readings for August are due at 1:30 p.m. London time, and are expected to show inflation stateside continuing to run hot. The latest print comes after U.S. producer prices leaped 8.3% on an annual basis in August, the largest yearly increase since records began in November 2010.

Shares in Asia-Pacific were also mixed on Tuesday as investors looked ahead to the figures, with tightening Chinese regulation also a key focus for investors in the region.

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Stateside, stock index futures were little changed in early premarket trade on Tuesday after the S&P 500 snapped a five-day losing streak to close out Monday’s session in positive territory.

Meanwhile, House Democrats in Washington have proposed new tax hikes on individuals and corporations to finance a $3.5 trillion spending package.

Back in Europe, European Central Bank policymaker Isabel Schnabel said on Monday that the ECB is ready to act if inflation does not ease as soon as next year, as currently expected.

The fallout from Brexit continues to rumble on, with Britain once again on Monday threatening to unilaterally suspend the Northern Ireland protocol, a key tenet of the withdrawal agreement, if the European Union does not budge on renegotiations to iron out implementation problems.

In terms of individual share price movement, British retailer JD Sports climbed 7.1% in early trade on Tuesday to top the Stoxx 600 after reporting a sevenfold surge in first-half earnings.

“While the reopening and end of government support schemes could dent confidence going forward for many retail businesses, JD Sports should continue to benefit as demand for sneakers and athleisure remains strong and will endure as a tailwind over the near term,” said Amisha Chohan, equity research analyst at Quilter Cheviot.

“It is no surprise, therefore, that the group now expects profit before tax for the full year to be at least £750m, compared to previous guidance of at least £550m and a 25% beat against market expectations.”

At the bottom of the index, Allfunds Group fell 4% after a share placement.

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