FTSE 100 up 0.27%; DAX up 0.37%; CAC 40 up 0.74% (Il Sole 24 Ore Radiocor) - Milan, 12 Jul - European shares were higher at mid-session, extending recent gains and climbing to fresh one-month highs. The Stoxx 600 index was up 0.39% it to its highest level since June 12.

Investors digested key US data showing that inflation in the world's biggest economy had fallen more than expected in June to 3% annually, down from 3.3% in May, rekindling hopes of an interest rate cut this year.

Dovish comments from Federal Reserve chair Jerome Powell earlier this week spurred optimism over a soft landing for the US economy.

According to the CME FedWatch Tool, the market is now pricing in a 91% chance the Fed cuts rates in September compared to a 75% chance just a day ago.

US stock futures pointed to a muted open after the S&P 500 index suffered yesterday its worst session since April, retreating from its 37th record close this year. Traders are now US producer price figures due later today.

German, French and Spanish inflation readings were also on tap today.

Caution prevailed in the region this week amid prospects of a hung parliament in France after a surprise win last Sunday for the country's leftwing coalition, the New Popular Front (Nouveau Front Populaire). The bloc won the second round of the general election, thwarting an expected surge of the far-right, but failed to secure an absolute majority.

The French election results came after a general election in the UK last week that saw the opposition Labour Party win a landslide victory as expected, ending 14 years in power for the Conservative Party.

In June, German consumer prices rose 0.1% on the previous month and grew 2.2% year on year, according to a final reading by the statistics office Destatis. Harmonised consumer prices, calculated for European Union purposes, grew 0.2% on the previous month and 2.5% year on year. The final data confirmed the preliminary readings.

In June, French consumer prices rose 0.1% month on month and 2.2% year on year, according to a a final reading by the statistics office Insee. In the preliminary reading annual inflation was 2.1%. Harmonised consumer prices, calculated for European Union reasons, rose 0.2% month on month and 2.5% year on year, the data showed. In the preliminary reading, monthly inflation was 0.1%.

In July 2024, consumer prices in Italy are expected to rise by 0.2% compared to the previous month and by 1.0% year on year, according to an estimate from the research arm of retailers' association Confcommercio. The modest increase seen in the annual inflation rate is in line with expectations and shouldn't endanger the possibility of reaching an average inflation rate near 1.0% for 2024 as a whole, Confcommercio said. In July, a trend for price increases in food products to moderate is expected to continue, with Confcommercio estimating an annual inflation rate for food of 1.4%.

At 1125 GMT, the London FTSE 100 was up 0.27% at 8,245 points, the Frankfurt DAX was up 0.37% at 18,609 points, the Paris CAC 40 up 0.74% at 7,683 points, while in Milan the FTSE MIB was up 0.49% at 34,485 points, and in Madrid the IBEX 35 was up 0.46% at 11,221 points.

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(RADIOCOR) 12-07-24 13:42:28 (0324) 5 NNNN