“European Stock Futures Remain Unchanged Prior to Crucial U.S. Inflation Figures”
On Wednesday, European stock markets are expected to open with little change, as investors remain cautious ahead of the U.S. inflation report for March, which may guide future monetary policy decisions by the Federal Reserve.
The DAX futures contract in Germany traded 0.1% higher, while CAC 40 futures in France and the FTSE 100 futures contract in the U.K. traded mostly unchanged. While European equities posted slight gains on Tuesday after the long Easter weekend, investors are still awaiting the U.S. CPI index for March to gauge how sticky prices may be, and therefore the likely response from the Federal Reserve.
Although the perception is that the Fed is nearing the end of its aggressive rate-hiking cycle, there may be room for another increase in May when policymakers next meet. Philadelphia Federal Reserve Bank President Patrick Harker reiterated on Tuesday that the central bank is committed to reducing inflation from its elevated levels.
There is little major economic data expected in Europe on Wednesday, so stock markets may trade cautiously ahead of the U.S. inflation report, which is anticipated to show that core inflation, excluding volatile food and energy prices, increased by 0.4% on a monthly basis and 5.6% year-over-year in March.
Meanwhile, French luxury goods group LVMH Moët Hennessy Louis Vuitton is expected to release a sales update later on Wednesday, which may provide insight into how demand from China is responding to the lifting of COVID-19 restrictions last year. Finally, ahead of the release of the U.S. inflation data and the U.S. government crude inventories, oil prices remained stable on Wednesday, following gains of around 2% on Tuesday, despite crude stockpiles rising by approximately 380,000 barrels last week, against expectations for a small decline, according to the American Petroleum Institute. By 02:00 ET, U.S. crude futures traded 0.2% higher at $81.67 a barrel, while the Brent contract also climbed 0.2% to $85.79. Gold futures also rose 0.7% to $2032.90/oz, while EUR/USD traded 0.2% higher at 1.0928.