Europe midday: Shares slide into the red ahead of US CPI

European shares slipped into the red as investors awaited US inflation data later in the day, while the earnings and trading statement deluge continued.

The pan-European Stoxx 600 was up 0.23% at midday BST. Economists expect US headline CPI to hold steady at an annual 5% and core CPI to fall slightly to 5.5%.

‘’The extent to which price pressures are still weighing on the American economy is in sharp focus today, with investors watching and waiting for the latest inflation snapshot. This is a big piece of the puzzle for central bank policymakers and will help them decide on whether to press press pause on rate hikes in June,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“If headline CPI comes in as expected … it will indicate that monetary policy has been wound tight enough to keep prices cranking down. There will still be worries that due to the lag effect, aggressive rate hikes might still bring stronger than expected disinflationary shockwaves in the months to come, which could push the US into a deeper downturn.”

“This is being reflected in oil prices with Brent Crude dropping back below $77 a barrel, as traders assess the potential knock-on effects of a US recession on global demand.”

In economic news German inflation in April was confirmed at 7.2% from 7.4% a month earlier, according to the Federal Statistical Office.

In equity news shares in Swedish Orphan Biovitrum slumped after it agreed to buy US biotech CTI BioPharma, which develops therapies for blood-related cancers, in a deal valued at $1.7bn.

Sweden’s SBB rebounded after Tuesday’s sharp fall as it pulled a rights issue.

Credit Agricole, France's second-biggest listed bank, gained almost 5% after posting better-than-expected earnings as market volatility boosted trading revenue.

British pubs group JD Wetherspoon forecast record full-year sales and its annual profit to be closer to the top end of market expectations.

Travel firm Tui fell despite forecasting strong revenue and higher profit for 2023 on the back of strong booking momentum and narrower losses.

Melrose rose as it reported trading above expectations.

Reporting by Frank Prenesti for Sharecast.com