European stock futures mixed; U.K. CPI, BOJ in focus

  • Stock Market News
European stock futures mixed; U.K. CPI, BOJ in focus

By Peter Nurse - European stock markets are expected to open in a mixed fashion Wednesday, as investors digest fresh inflation data out of the U.K. as well as dovish signals from the Bank of Japan.

At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France climbed 0.2%, while the FTSE 100 futures contract in the U.K. fell 0.1%.

Consumer prices rose at an annual rate of 10.5% in the U.K. in December, a drop from 10.7% the prior month, while the monthly rate climbed 0.4%, unchanged from November.

Although this level remains highly elevated, the reduction in the annual figure plays into the wider narrative that inflation has peaked in the West, and central banks can look at reducing the pace of their interest rate hikes. 

European equities received a largely positive handover from Asia Wednesday, after the Bank of Japan maintained its current range of yield curve control, confounding market expectations for more widening in the bank’s target range, which could have resulted in a tightening of monetary policy.

The central bank maintained interest rates at record-low levels, and said it will keep policy accommodative for the time being.

The final release of December Eurozone CPI is due later in the session, and is expected to be confirmed showing annual growth of 9.2%, a drop from 10.1% the prior month.

Markets were also awaiting more cues on the U.S. economy from a string of Federal Reserve speakers, while U.S. retail sales are seen falling 0.8% in December, providing more impetus for the Fed to slow its pace of rate hikes. 

In corporate news, Barry Callebaut (SIX: BARN ) sales volumes fell 5.1% in the three months to the end of November, the world's largest chocolate maker said on Wednesday, as it was hit by lower output at its biggest factory.

Oil prices rose Wednesday, extending the previous session’s gains on increased optimism that the removal of the COVID restrictions from the Chinese economy will result in a sharp recovery in the demand for fuel in the largest consumer of crude this year.

The Organization of Petroleum Exporting Countries left its global oil demand forecast unchanged at a rise of 2.22 million barrels per day in a monthly report, released on Tuesday, but said Chinese oil demand would grow 510,000 barrels per day this year after contracting for the first time in years in 2022.

The International Energy Agency is scheduled to release its monthly report later in the day, while the American Petroleum Institute is set to report its weekly forecast of U.S. crude stockpiles, a day later than usual after Monday’s U.S. holiday.

By 02:00 ET, U.S. crude futures traded 1.1% higher at $81.33 a barrel, while the Brent contract rose 0.9% to $86.70. Both contracts surged over 2% on Tuesday in a late-session rally.

Additionally, gold futures fell 0.2% to $1,906.35/oz, while EUR/USD traded 0.1% higher at 1.0798.

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