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European Markets Close Higher on Inflation Data Boost; Stoxx 600 Up Over 1.4%

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This is CNBC's live blog covering European markets.

European markets closed higher on Wednesday as inflation data out of France and Germany indicated that consumer price increases across the euro zone are slowing.

The pan-European Stoxx 600 closed up 1.4%, with retail stocks adding 3.3% to lead gains as most sectors and major bourses ended in positive territory. Oil and gas stocks, however, fell 3.1%.

U.S. stocks wavered Wednesday and rates slid as investors looked ahead to the release of more U.S. economic data, plus the latest minutes from the U.S. Federal Reserve's most recent policy meeting.

Global markets will be looking for insight into the central bank's thought process when it comes to interest rates and the state of health of the U.S. economy.

In addition, the Job Openings and Labor Turnover Survey, better known as JOLTS, and ISM manufacturing data will be released stateside.

In Europe Tuesday, markets closed higher, buoyed after Germany published lower-than-expected inflation figures for December, down to 9.6% year on year. Inflation figures from France also offered a positive surprise on Wednesday, slowing to 6.7% in December from a record high 7.1% in November.

Stocks on the move: Ocado up 7%, Avanza down 7%

Shares of British online grocer Ocado climbed more than 7% to lead the Stoxx 600 by mid-afternoon after Evercore ISI raised its price target for the stock.

At the bottom of the index, Sweden's Avanza Bank fell 7% after weak monthly data for December.

- Elliot Smith

The UK will perform the worst out of the major developed economies in 2023, strategist says

Chief Strategist at Principal Global Investors Seema Shah expects a tough start to 2023 for the U.K. as household savings drop and the impacts of rate hikes are felt.

French inflation slows unexpectedly

The skyline from the Arc de Triomphe in Paris, France.
Bloomberg | Bloomberg | Getty Images
The skyline from the Arc de Triomphe in Paris, France.

Inflation in France slowed to 6.7% in December from a record high of 7.1% the previous month, preliminary figures published Wednesday morning showed.

Economists polled by Reuters had forecast year-on-year harmonized inflation, which is adjusted for comparisons across the euro area, to come in at 7.2%.

The most significant drop was in energy, where prices rose by 15.1% annually, down from 18.4% in November.

That follows inflation slowing more than expected in Germany, which on Tuesday reported HICP falling to 9.6% from 11.3%; and in Spain, which last week recorded a fall to 5.8% from 6.7%.

Analysts are looking for indications that inflation has peaked in the euro zone's main economies; and whether this will influence the European Central Bank, which previously said interest rates would need to go "significantly" higher.

Analysts at ING said the path to substantially lower inflation rates would not be easy and remained contingent on energy markets and agricultural challenges impacting food prices.

"[Germany's] inflation numbers are not a relief, yet, only a reminder that eurozone inflation is still mainly an energy price phenomenon," they said in a note. "The ECB cannot and will not base its policy decisions on highly volatile energy prices."

Italy will report on inflation figures Thursday, followed by a flash estimate for the euro area on Friday.

— Jenni Reid

Swiss annual inflation at 2.8% in 2022

Swiss consumer prices added 2.8% year-on-year and eased by 0.2% on the month in December, the Swiss Federal Statistical Office said today.

It found Swiss inflation averaged 2.8% in 2022, up from 0.6% in 2021. It attributed the annual hike to higher costs for petroleum products, gas, cars and house rentals, which offset price declines for medicines and fixed-line and mobile communication.

Stocks on the move: BKW up 4%, Tenaris down 5%

Swiss power supplier BKW jumped 6% in early trade to lead the Stoxx 600 after projecting an "outstanding" full-year result for 2022.

Italian steel pipe manufacturer Tenaris fell 5% to the bottom of the European blue chip index.

- Elliot Smith

CNBC Pro: Analysts see these 10 global renewable energy stocks rising despite higher rates with one offering 50% upside

Skyrocketing energy costs have spurred investment in renewable energy across the world.

Swiss investment bank UBS named 10 prominent renewable energy players capitalizing on the trend and are set to outperform over the next year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Wall Street is bullish on this chip giant, with Morgan Stanley giving it 55% upside

The once-hot chip sector suffered in 2022, but Wall Street looks to be turning more optimistic on semiconductor stocks for the year ahead.

Recently, several pros have urged investors to take a longer-term view on the sector, given the importance of chips in several key secular trends.

Analysts named one stock in particular they're bullish on, citing its earnings potential and future profitability.

CNBC Pro subscribers can read more here.

— Weizhen Tan

U.S. will avoid recession in 2023, Goldman Sachs says

Goldman Sachs has an out-of-consensus forecast for the U.S. economy in 2023.

"Our economists continue to believe that the US will avoid recession as the Fed successfully engineers a soft landing of the economy," analysts wrote Tuesday.

"This out-of-consensus forecast partly reflects our view that a period of below-potential growth is enough to gradually rebalance the labor market and dampen wage and price pressures," the note said. "But it also reflects our analysis that indicates that the drag from fiscal and monetary policy tightening will diminish sharply next year, in contrast to the consensus view that the lagged effects of interest rate hikes will cause a recession in 2023."

In addition, the bank today raised its 4Q22 GDP growth forecast by 10bp to +2.1% on the back of a surprisingly strong November Construction Spending release

"The disconnect between the resilience of the US economy in 2022 and the downdraft experienced by stocks is has been a key narrative of the past year," Goldman said. "And, whether this disconnect continues, or the economy matches the market downdraft, or the market rebounds in the wake of an economic soft landing may be at least part of the narrative of 2023."

—Carmen Reinicke

CNBC Pro screens for low-volatility stocks amid fears of a bumpy ride ahead

Stock markets endured a horrible 2022 as major indexes clocked their worst performances in more than a decade.

As market pros warn investors of bumpy times ahead, CNBC Pro used FactSet data to screen for low-volatility stocks that not only beat the market in 2022 but are expected to rise further this year.

Pro subscribers can read more here.

— Zavier Ong

European markets: Here are the opening calls

European markets are heading for a higher open Wednesday as investors await the latest U.S. Federal Reserve minutes, looking for signs of more interest rates to come.

The U.K.'s FTSE 100 index is expected to open 11 points higher at 7,570, Germany's DAX 28 points higher at 14,227, France's CAC up 9 points at 6,643 and Italy's FTSE MIB up 31 points at 24,449, according to data from IG.

In Europe Tuesday, markets closed higher, buoyed after Germany published lower-than-expected inflation figures for December, down to 9.6% year on year. Inflation figures from France are due on Wednesday.

— Holly Ellyatt

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