European markets await US inflation data


LONDON – European stocks are expected to open slightly higher on Thursday as global markets brace for the latest inflation reading in the United States

The data is crucial because it could help determine the Federal Reserve’s timing to raise interest rates or reduce its asset purchase program.

London’s FTSE would open 8 more points to 7,087, the German DAX 9 more points to 15,601, the French CAC 40 5 points to 6,571 and the Italian FTSE MIB 4 more points to 25,722, according to IG.

Global markets focus mainly on US inflation data expected Thursday; Asia-Pacific stocks edged up Thursday morning and futures on major US stock indexes rose during Wednesday night’s overnight session as investors eyed the inflation report.

The Labor Department is expected to release its Consumer Price Index data at 8:30 a.m. ET Thursday. Economists polled by Dow Jones expect the May CPI report to show prices up 4.7% year-on-year after the 4.2% increase in April.

The Federal Reserve has attempted to determine whether the higher price pressures are only temporary as the economy continues to rebound from the pandemic-induced recession.

For weeks, investors have been wondering whether a surge in inflation could prompt the Fed to slow the pace of its asset purchases or start signaling an interest rate hike. Still, some say these fears are premature and that the central bank will give markets enough time before taking action.

European investors are also gearing up for the next European Central Bank meeting on Thursday, with most expecting the central bank to keep its foot on the stimulus.

Many believe that the ECB will maintain its current course due to the uncertain economic outlook and to avoid an unwanted tightening of financial conditions.

Read more: European Central Bank should maintain stimulus measures despite inflation fears

At Thursday’s meeting, the ECB will also update its quarterly inflation and growth projections, alongside its traditional rate decision and press conference. The interest rate decision is announced at 12:45 p.m. London time.

Meanwhile, British Prime Minister Boris Johnson will meet his American counterpart Joe Biden on Thursday before the start of the Group of Seven summit in Cornwall which begins on Friday.

The winnings come from Manchester United and Ted Baker.

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– CNBC’s Thomas Franck and Annette Weisbach contributed to this market report.

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