FX.co ★ European Shares Inch Higher On Rate Cut Hopes

European stocks climbed broadly on Friday, buoyed by robust U.S. GDP data that heightened expectations of a soft landing for the world’s largest economy and paved the way for an imminent rate cut by the Federal Reserve.

Earlier this week, a former Fed hawk cautioned that delaying rate cuts until September “unnecessarily increases the risk” of a recession.

Investors will turn their attention to U.S. June PCE data later today, as markets anticipate next week’s Federal Reserve meeting.

The pan-European STOXX 600 rose by 0.4% to 510.73, following a 0.7% decline on Thursday.

Germany’s DAX showed slight gains, despite retreating from early advances.

France’s CAC 40 climbed 0.7%, while the U.K.’s FTSE 100 increased by 0.6%. Notably, Italian oil major ENI surged 2.8% after its Q2 profit exceeded forecasts.

Ams OSRAM soared by 17%, as the sensor maker's quarterly net loss came in better than anticipated.

British lender NatWest jumped 7% after revising its full-year revenue forecast upwards.

Defense and aerospace group Babcock International surged 5.3% following strong FY24 results.

Hermes International rallied nearly 4% in Paris, reporting a 13% rise in second-quarter sales, defying a broader luxury downturn.

Eyewear manufacturer EssilorLuxottica surged by 7.4% after posting robust financial performance for the first half of 2024.

In contrast, construction-to-telecom conglomerate Bouygues dropped 1%, despite delivering better-than-expected core profit for the first half of the year.

Capgemini shares slumped by 11%, as the IT consulting firm revised its annual revenue forecast downward to a decline of between 0.5% and 1.5%, from an earlier projection of up to a 3% rise.

German luxury automaker Mercedes-Benz experienced volatile trading, moving lower after trimming its 2024 profit outlook for its core car division.