European markets closed higher on Tuesday after the U.S. inflation print for October came in cooler than expected.
The pan-European Stoxx 600 index ended up 1.4%, with almost all sectors and major bourses in positive territory. Retail stocks added 3.1% to lead gains, while oil and gas stocks dropped 0.2%.
The October consumer price index was flat month over month, while the core CPI — which excludes volatile food and energy prices — rose 0.2%. Economists surveyed by Dow Jones were expecting a 0.1% monthly rise in CPI, and 0.3% in core CPI.
Other data releases in Europe on Tuesday included euro area third-quarter GDP and U.K. labor market figures, along with Germany’s ZEW survey of economic sentiment for November.
Earnings before the bell came from the likes of Vodafone, RWE and Imperial Brands.
Asia-Pacific markets rose overnight as investors looked forward to highly anticipated talks between the U.S. and China, as well as more economic data. U.S. President Joe Biden and China’s President Xi Jinping’s will meet in-person in San Francisco this week, for the first time in about a year.
U.S. stocks spiked on the cooler-than-expected inflation report while 10-year Treasury yields tumbled. The tech-heavy Nasdaq rose 2.3% in early deals.
Investors were looking to gauge the path of inflation that will inform expectations for how, or if, the Federal Reserve will adjust interest rates going forward.