European Shares Seen Mostly Higher At Open
European stocks look set to open mostly higher on Wednesday, though the upside may remain capped due to escalating tensions in Gaza and ahead of a meeting between U.S. President Joe Biden and his Chinese counterpart Xi Jinping on the sidelines of the 21-member APEC summit in San Francisco.
Meanwhile, the U.S. House of Representatives passed a stopgap bill Tuesday to keep the government open, putting Congress on a path to avert a shutdown.
The legislation now goes to the Senate where majority Democrats are expected to back it.
Asian markets were sharply higher on growing bets the U.S. Federal Reserve will cut interest rates next year. Markets currently price in a 50 basis-point rate cut by July.
After U.S. inflation fell more than expected in October, traders now await reports on retail sales, producer prices and New York manufacturing later in the day for further clues on the rate outlook.
Consumer and producer price data from the U.K. and industrial production figures from the euro area are due later in the session, headlining a busy day for the European economic news.
Earlier in the day, China reported better-than-expected retail sales and industrial data for October while the readings on fixed asset investment and investment into real estate investment disappointed.
The dollar index rose slightly in Asian trade after dropping below 104 level in the previous session. Gold traded slightly higher, buoyed by the weakening dollar and Treasury yields. Oil inched up slightly after settling on a flat note Tuesday.
U.S. stocks rallied overnight to build on their strong November gains as tamer than expected inflation data bolstered the view that the Fed was probably done with rate hikes.
The 10-year Treasury yield tumbled below 4.5 percent after data showed the annual rate of consumer price growth slowed to 3.2 percent in October from 3.7 percent in September. Economists had expected the pace of growth to decelerate to 3.3 percent.
Core consumer prices were up by 4.0 percent year-on-year, reflecting the smallest year-over-year increase since September 2021.
The tech-heavy Nasdaq Composite soared 2.4 percent to hit over three-month high while the Dow and the S&P 500 climbed 1.4 percent and 1.9 percent, respectively to set new two-month closing highs.
European stocks also closed on a buoyant note on Tuesday as U.S. inflation showed signs of slowing.
The pan European STOXX 600 advanced 1.3 percent after the release of Eurozone GDP, employment and German investor sentiment data.
The German DAX rallied 1.8 percent and France’s CAC 40 surged 1.4 percent while the U.K.’s FTSE 100 edged up 0.2 percent.
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