Investors are nervously waiting for the latest U.S. inflation report, which could affect how the Federal Reserve handles the economy in the future. As a result, European stock markets are likely to open Wednesday with little change.
At 2:05 AM ET (6:05 GMT), the DAX futures contract in Germany was up 0.1%, the CAC 40 futures contract in France was up 0.1%, and the FTSE 100 futures contract in the U.K. was unchanged.
This week, investors have been on edge because the stock market hasn’t changed much. They are waiting for the U.S. consumer price index for June, which will be released Wednesday evening.
This is expected to show that annual headline inflation, which includes food and energy prices, will rise above May’s level of 8.6 percent to 8.8 percent, which would be the highest level in 40 years.
A number this high is likely to convince the U.S. central bank that it needs to keep raising interest rates aggressively, on top of the 75 basis point increase it made at its last meeting. This is true even if it risks putting the U.S. economy, which is the main driver of global growth, into recession.
Back in Europe, inflation numbers from places like Germany, Spain, and France are due Wednesday. These numbers should show that consumer prices in the Eurozone are still high.
The European Central Bank has said that it will raise interest rates at its next meeting, which will take place later in July. However, the mood in the region is very low because people are worried that the region’s energy crisis will get worse because the biggest pipeline that brings Russian gas to Germany has started 10 days of annual maintenance.
The economic sentiment indicator for Germany, which is put together by the think tank ZEW, fell on Tuesday to its lowest level in eleven years. This was because the country might have to ration gas this winter.
On a brighter note, the U.K.’s GDP grew by 0.5% in May. This was the first growth in three months, and it was much better than the 0.1% growth that was expected.
In business news, Credit Suisse (SIX:CSGN) will be in the spotlight after the Swiss bank delayed the IPO of its 1a Immo PK real estate fund, saying that the current market turmoil made it too risky.
Oil prices were mostly flat on Wednesday because traders were waiting with caution for U.S. inflation data, which could lead to more rate hikes in the U.S., which would hurt global activity.
According to data released Tuesday by the American Petroleum Institute, crude oil stocks in the U.S. went up by about 4.8 million barrels in the week ending July 8. This makes people even more worried about a drop in oil demand.
The official government report on the inventory is due Wednesday evening.
At 2:05 a.m. ET, U.S. crude futures were trading at the same price of $95.84 per barrel, and the Brent contract was also unchanged at $99.50. Both contracts went down by more than 7% on Tuesday, and a barrel of oil went below $100 for the first time since April.
Gold futures fell 0.1 percent to $1,722.75/oz, while the EUR/USD rose slightly to 1.0039.
