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European markets set for higher open as investors digest fall in U.S. inflation

13 July 2023 09:44 (UTC +04:00)

European markets are set to nudge higher at Thursday’s open after a cooler-than-expected U.S. inflation reading, APA reports citing CNBC.

The pan-European Stoxx 600 gained 1.5% in Wednesday’s session as global markets react to a fall in U.S. consumer price inflation to an annualized 3%.

Core CPI came in at 4.8%, below a consensus expectation of 5% and the lowest reading since October 2021.

While markets are still pricing in a more than 92% probability of a 25 basis point rate rise from the Federal Reserve this month, according to CME’s FedWatch tool, the slowdown in inflation boosted economic sentiment and raised hopes of a less aggressive path ahead.

Asia-Pacific stocks were higher Thursday, while the S&P 500 closed Wednesday at its highest level since April 2022.

However, China’s economy flashed another sign of slowing growth as June exports contracted at the fastest pace since the start of the pandemic.

U.S. producer price figures are due today.

Europe releases include a U.K. gross domestic product estimate for May, France final inflation reads for June and euro zone industrial production.

The U.K.’s FTSE 100 is seen opening around 3.6 points higher at 7,420, according to IG data.

Germany’s DAX is on course for a 13.5 point rise to 16,038 and France’s CAC 40 is expected to climb by around 19 points to 7,356, with Italy’s MIB up 43.4 points to 28,660.