European markets opened higher on Wednesday as traders awaited the latest U.S. inflation data, which will inform the Federal Reserve’s decision to cut interest rates.
The pan-European STOXX 600 index was up around 0.4% in early trading, with most sectors and all major exchanges posting gains shortly after the opening bell.
london FTSE 100 It rose 0.7% at 8:07 a.m. London time after official data showed UK inflation fell to a lower-than-expected 2.5% in December. Economists polled by Reuters had expected the figure to be unchanged from November’s 2.6% reading.
The focus for global markets on Wednesday will be the U.S. consumer inflation index, due out at 8:30 a.m. ET. Economists surveyed by Dow Jones expect overall CPI to rise 0.3% quarter-to-quarter and 2.9% higher than the previous 12 months.
The data will be released after the December wholesale inflation report, which came in below expectations. Producer prices rose just 0.2%, missing the Dow Jones consensus estimate of a 0.4% gain.
Both reports will inform the Federal Reserve’s interest rate policy when it meets later this month. Federal funds futures trading suggests the Fed is almost certain to keep rates on hold at the end of its two-day meeting later this month. According to market pricing, there is a 97% chance that March interest rates will remain at the current target range of 4.25%-4.5%. CME Group’s Federal Reserve Watch tool.
Global bond yields continue to rise as traders anticipate a slower pace of rate cuts this year, signs of economic strength and potential weakness ahead. Last week’s jobs data showed nonfarm payrolls grew much faster than expected in December, but President-elect Trump has said he will enact tariff policies after taking office that he expects will stoke inflation.
Transaction update settings from Experian and Hayes Wednesday.
Domestic investors will also be watching earnings reports from major banks on Wednesday: JPMorgan Chase, Citigroup, Goldman Sachs and Wells Fargo will report fourth-quarter results. Morgan Stanley and Bank of America are scheduled to release reports on Thursday.
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