European stock markets are going to open higher on Wednesday as investors anticipate key inflation data from both the U.S. and U.K. The U.K.’s FTSE index is going to rise by 29 points to 8,262, Germany’s DAX is going to climb 32 points to 17,837, France’s CAC 40 is increasing by 12 points to 7,286, and Italy’s FTSE MIB is likely to gain 68 points to 32,168, according to IG data.
U.K. & U.S. Inflation Data to Drive European Market Movements
Today’s U.K. inflation report will be the first since the Bank of England’s decision to lower interest rates by 25 basis points last month. Economists surveyed by Reuters forecast the headline inflation rate to edge up to 2.3%, from 2% in the previous two months.
Money markets are currently pricing in a strong likelihood of additional rate cuts by the Bank of England, potentially totaling 50 basis points for the year. The central bank’s key rate is presently at 5%.
The U.K. data precedes the U.S. consumer price index release for July, which is going to show a 0.2% increase from the previous month’s 0.1% decline. Investors will be keen to see if this data could influence the U.S. Federal Reserve’s decision on rate cuts in September, potentially providing clarity amid recent market fluctuations.
Also, on Tuesday, the U.S. producer price index indicated a 0.1% rise in wholesale prices for July, slightly below the 0.2% gain anticipated by economists according to Dow Jones estimates.
U.S. stock futures were largely unchanged on Tuesday evening, while Asia-Pacific markets displayed mixed results overnight. The Reserve Bank of New Zealand’s decision to cut benchmark lending rates and Japan’s Prime Minister Fumio Kishida’s announcement of his resignation in September contributed to the regional market variability.
In European earnings news, reports are going from UBS, RWE, Carlsberg, Aviva, Vestas Wind, TUI Group, and Thyssenkrupp. Additional data releases will include French inflation statistics.
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