European Shares Seen Opening On Cautious Note

European stocks are likely to open on a cautious note Thursday, as investors await a highly anticipated report on U.S. consumer price inflation, which could impact expectations for how aggressive the Federal Reserve will be regarding raising interest rates.

Fed Bank of Cleveland President Loretta Mester, alongside Atlanta counterpart Raphael Bostic, signaled all options are on the table for the size of policy makers’ first interest-rate increase in March 2022. Markets are currently pricing in more than five Fed hikes in 2022.

Asian markets traded mixed, a dollar gauge fell and U.S. Treasury yields eased while gold was moving in a tight range. Oil prices held steady after data showed an unexpected drop in U.S crude inventories.

The euro was bolstered by reports that more European Central Bank policymakers were losing confidence in the central bank’s current forecasting and emboldened a shift towards interest rate hikes later in 2022.

U.S. stocks closed higher overnight, with tech stocks leading the surge for a second straight session amid expectations that fears about a more aggressive hawkish cycle are a bit overdone.

The Nasdaq Composite index spiked as much as 2.1 percent, while the S&P 500 rallied 1.5 percent and the Dow rose 0.9 percent.

European stocks rose the most in two months on Wednesday, with some upbeat earnings reports and data showing an unexpected jump in Germany’s exports boosting sentiment.

The pan European Stoxx 600 jumped 1.7 percent. The German DAX surged 1.6 percent, France’s CAC 40 index climbed 1.5 percent and the U.K.’s FTSE 100 added 1 percent.

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