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At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.4% higher, CAC 40 futures in France climbed 0.4%, while the FTSE 100 futures contract in the U.K. traded largely flat.
Stocks in Europe are set to feel the positivity generated by the strong close on Wall Street overnight, with the blue chip Dow Jones Industrial Average gaining over 300 points, or 0.9%, on optimism that the upcoming U.S. inflation report for June will convince the Federal Reserve to come to the end of its interest rate hikes sooner than later.
Fed policymakers are widely expected to increase interest rates at its next meeting later in the month, after pausing last month, but investors are eagerly awaiting the release of the monthly consumer inflation report for clues as to how many more hikes are left in the tank.
The headline annual figure is expected to have risen by 3.1% in June, after May’s 4% rise, while the core rate is expected to have dropped for a third straight month to 5% from 5.3%.
Concerns that aggressive tightening to curb inflation will result in the largest economy in the world, and a major growth driver, falling into recession have weighed on global markets this year.
Back in Europe, there are more inflation numbers to digest the day after German inflation rose by 6.4% on an annual basis in June, interrupting a steady decline since the start of the year.
This time the inflation data comes from Spain, and the situation couldn’t be more different.
Spanish consumer prices are expected to rise 1.9% year-on-year in June, below the European Central Bank’s 2% target, suggesting the central bank should be considering ending its rate-hiking cycle.
However, Germany is the largest economy in the eurozone, and the ECB’s series of interest-rate increases still appears to have some way to go.
Oil prices stabilized Wednesday, as predictions of higher demand balanced out rising U.S. crude stockpiles.
The U.S. EIA released its short-term energy outlook on Tuesday, and projected demand would outpace supply by 100,000 barrels a day in 2023 and by 200,000 barrels a day in 2024.
This comes as major oil producers, Saudi Arabia and Russia, have announced additional output cuts for August, while the U.S. dollar fell to two-month lows, supporting the oil market, on bets that the Federal Reserve was close to ending its rate-hiking cycle.
However, data from the American Petroleum Institute cooled the rally as U.S. crude stockpiles unexpectedly grew by over 2 million barrels in the week to July 7. The official numbers from the Energy Information Administration are due later in the session.
By 02:00 ET, the U.S. crude futures traded 0.1% lower at $74.78 a barrel, while the Brent contract dropped 0.1% to $79.31.
Additionally, gold futures rose 0.4% to $1,944.60/oz, while EUR/USD traded 0.2% higher at 1.1031.
