European Shares Seen Up Ahead Of US CPI Data, Fed Meeting

(RTTNews) - European stocks are likely to open on a firm note Wednesday, though overall gains may remain capped ahead of the U.S. inflation report and the Federal Reserve decision later in the day.

Economists expect consumer prices to inch up by 0.1 percent in May after climbing by 0.3 percent in April, while core consumer prices, which exclude food and energy prices, are expected to increase by 0.3 percent for the second straight month.

The annual rate of growth by consumer prices is expected to come in unchanged at 3.4 percent, but the annual rate of core consumer price growth is expected to slow to 3.5 percent in May from 3.6 percent in April.

The U.S. central bank is widely expected to leave interest rates unchanged, but traders will pay close attention to the accompanying statement as well as officials' latest projections for the economy and interest rates.

Closer home, monthly GDP and foreign trade figures from the U.K. as well as final inflation data from Germany may garner investor attention later in the day.

Economists expect U.K. GDP to remain flat on month in April after rising 0.4 percent in March.

China's consumer inflation held steady in May while factory deflation eased, official data released earlier today showed.

The consumer price index (CPI) rose 0.3 percent in May year-on-year, the same pace as seen in April.

The producer price index, which was stuck in deflation since September 2022, dropped 1.4 percent in the month as against a 2.5 percent decline in April.

Asian markets were mostly lower while the dollar held steady after hitting a four-week high against peer currencies overnight.

Treasuries steadied after climbing on a solid $39 billion sale.

Gold was subdued above $2,300 per ounce while oil added to overnight gains on bullish inventory data and upbeat global demand views from the U.S. Energy Information Administration and OPEC.

U.S. stocks ended mixed overnight as Apple unveiled its artificial intelligence features and Treasury yields extended their decline ahead of upcoming inflation data and the Federal Reserve's policy meeting.

The tech-heavy Nasdaq Composite climbed 0.9 percent and the S&P 500 edged up 0.3 percent to reach new record closing highs while the Dow dipped 0.3 percent.

European stock fell on Tuesday as EU political uncertainty weighed and U.K. employment data painted a mixed picture of the economy.

The pan European STOXX 600 declined 0.9 percent. The German DAX shed 0.7 percent, France's CAC 40 gave up 1.3 percent and the U.K.'s FTSE 100 lost 1 percent.