European Shares Poised To Open Higher With Focus On ECB

European stocks may open on a firm note Thursday as investors look past high core U.S. inflation number and shift their focus to producer price inflation and weekly jobless claims data due later in the day for hints regarding the size of future rate cuts by the Federal Reserve.

After August’s inflation report matched expectations, markets are now more confident the Fed will cut its rate by 25 basis points next week and reserve the potential for more aggressive action later this year in case there is further deterioration in the job market.

Meanwhile, the European Central Bank’s monetary policy announcement is due later in the day and the central bank is widely expected to lower interest rates for the second time this year.

Asian markets followed Wall Street higher, with Japan’s Nikkei surging more than 3 percent to snap a seven-day slide, buoyed by the yen’s reversal from its strongest level against the dollar since December.

The dollar held near a four-week high against the euro and gold edged up slightly, while oil extended overnight gains due to hurricane disruptions and concerns over its impact on U.S. production.

U.S. stocks reversed course to end higher overnight as Brent crude prices rebounded from 3-1/2-year lows and a key inflation report signaled slowing price growth, bolstering expectations of a 25-bps rate cut at next week’s FOMC meeting.

The tech-heavy Nasdaq Composite surged 2.2 percent, the S&P 500 climbed 1.1 percent and the Dow inched up 0.3 percent.

Data showed the consumer price index slowed to annual rate of 2.5 percent in August from 2.9 percent in July, marking the lowest figure since February 2021.

The so-called core consumer price index, which strips out food and energy costs, came in higher than expected, rising 0.3 percent from July, the most in four months, and 3.2 percent from a year ago.

European stocks ended mixed on Wednesday as investors looked ahead to ECB and Fed meetings for directional cues.

The pan European STOXX 600 ended flat with a positive bias. The German DAX edged up 0.4 percent, while France’s CAC 40 slipped 0.1 percent and the U.K.’s FTSE 100 dipped 0.2 percent.

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