European stocks are expected to open on a positive note Wednesday, though gains may be limited ahead of the U.S. inflation report and the Federal Reserve's decision later in the day.
Economists predict a modest increase of 0.1 percent in consumer prices for May, following a 0.3 percent rise in April. Core consumer prices, which exclude volatile food and energy costs, are anticipated to grow by 0.3 percent for the second consecutive month.
The annual growth rate for consumer prices is projected to remain steady at 3.4 percent, while the annual core consumer price growth is expected to decelerate to 3.5 percent in May, down from 3.6 percent in April.
The U.S. Federal Reserve is widely expected to keep interest rates unchanged. However, traders will closely scrutinize the accompanying statement and the latest economic and interest rate projections from Federal Reserve officials.
Closer to Europe, investors will likely focus on monthly GDP and foreign trade data from the U.K., along with final inflation figures from Germany.
Economists forecast that the U.K.'s GDP will remain unchanged for April after a 0.4 percent increase in March.
In China, consumer inflation remained stable in May, while deflation in the manufacturing sector eased, as shown by official data released earlier today.
The consumer price index (CPI) rose by 0.3 percent in May compared to the same month the previous year, matching the pace observed in April.
The producer price index, which has been in deflationary territory since September 2022, fell by 1.4 percent in May, following a decline of 2.5 percent in April.
Asian markets mostly trended lower, while the dollar remained steady after reaching a four-week high against other major currencies overnight.
U.S. treasuries stabilized after a strong $39 billion sale.
Gold remained subdued above $2,300 per ounce, while oil prices continued to rise, supported by bullish inventory data and optimistic global demand forecasts from the U.S. Energy Information Administration and OPEC.
U.S. stocks ended with mixed results overnight. Apple unveiled new artificial intelligence features, and Treasury yields continued to decline in anticipation of the upcoming inflation data and the Federal Reserve's policy meeting.
The tech-heavy Nasdaq Composite gained 0.9 percent, and the S&P 500 edged up 0.3 percent, reaching new record closing highs. Meanwhile, the Dow slightly declined by 0.3 percent.
European stocks fell on Tuesday due to political uncertainty within the EU and mixed U.K. employment data.
The pan-European STOXX 600 index decreased by 0.9 percent. Germany's DAX fell by 0.7 percent, France's CAC 40 dropped by 1.3 percent, and the U.K.'s FTSE 100 lost 1 percent.
