Europe open: Gains limited ahead of US inflation data

European stocks edged higher on Tuesday morning, though gains were limited as nerves set in ahead of some key economic data, including a closely watched reading of US inflation.

The Stoxx 600 index was up just 0.09% early on, with small gains across France, Germany, Italy and Spain partly offset by moderate falls in the UK.

"Investors are on the edge of their seats, waiting for the latest scoop on US inflation data to take a fresh direction in both stock and bond markets," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The US consumer price index, due out at 1330 GMT, is expected to show that annual inflation slowed to 3.3% in October from 3.7% the month before. However, core inflation (which excludes volatile items like food and energy) is forecast to remain at September's level of 4.1% – still firmly above the Federal Reserve's 2% target.

"The dollar index remains offered, the US political risks are casting shadows, and there's a rising chorus of opinions playing the guessing game on when and how much the Fed might trim the rates next year," Ozkardeskaya said.

It's set to be a busy day for economic data in Europe too, with the Germany ZEW sentiment survey and Eurozone GDP figures due out at 1000 GMT.

Meanwhile, UK wage growth eased in the three months to September, but earnings growth outstripped inflation, while the unemployment rate was unchanged at 4.2%, according to figures released on Tuesday by the Office for National Statistics. Average wage growth including bonuses fell to 7.9% from an upwardly-revised 8.2.% the month before.

Economists were expecting wage growth including bonuses to fall to 7.4%, but the slowdown supports the current inaction by the Monetary Policy Committee (MPC).

"As things stand, the labour market offers no obvious reason for the MPC to return to increasing rates, but equally, little cause for near-term cuts either," said Martin Beck, chief economic advisor to the EY ITEM Club.

In company news, Glencore was performing well in London after announcing plans to spend $6.9bn on a 77% stake in Teck Resources' steelmaking coal business in Canada's Rocky Mountains, Elk Valley Resources. EVR, located between British Columbia and Alberta, produced 21.5m tonnes of steelmaking coal in 2022, generating a pre-tax profit of C$6bn (£3.5bn).

German car parts group Continental AG was flying higher after Monday's news that it is cutting 5,500 job cuts in a major restructuring move.