European stock markets were poised to open higher on Wednesday as global investors closely monitored ongoing trade developments and fresh inflation figures from key economies.
According to data from IG, the U.K.’s FTSE 100 was expected to rise by 0.2%, while Germany’s DAX was set to climb 0.46%. France’s CAC 40 was projected to gain 0.3%, and Italy’s FTSE MIB was forecast to edge up by 0.33%.
Investor sentiment is being shaped by geopolitical trade pressures, particularly after reports surfaced that U.S. President Donald Trump urged the European Union to impose tariffs of up to 100% on Chinese and Indian imports. The move is aimed at penalizing those countries for continuing oil trade with Russia, in an effort to tighten pressure on Moscow amid the ongoing war in Ukraine. However, such aggressive measures also risk further disrupting global trade flows and diplomatic relations.
Inflation data remains a key driver across global markets this week. Chinese consumer price index (CPI) figures released overnight showed a sharper-than-expected decline, with August CPI falling 0.4% year-over-year—double the 0.2% drop predicted by analysts polled by Reuters. This deflationary trend in the world’s second-largest economy could influence central bank policy and investor expectations for growth.
In the U.S., traders are awaiting Wednesday’s producer price index (PPI) report, ahead of the more closely watched consumer price index (CPI) reading due Thursday. Economists surveyed by Dow Jones anticipate a 0.3% monthly increase in both PPI and CPI, with the annual CPI headline rate expected to reach 2.9%. The core CPI, excluding food and energy, is forecast to remain steady at 3.1%. Should the data meet these expectations, markets are likely to price in another interest rate cut by the U.S. Federal Reserve at its upcoming policy meeting next week.
Overnight, S&P 500 futures ticked slightly higher in anticipation of the inflation data, while Asia-Pacific markets saw modest gains as investors absorbed the Chinese figures.
In Europe, corporate earnings are also on the radar. Fashion giant Inditex and food conglomerate Associated British Foods are scheduled to report results today. Additionally, industrial production data from Spain and Italy is expected to provide further insights into the region’s economic health.
As markets open, investors remain cautiously optimistic, balancing hopes for easing inflation with uncertainty surrounding global trade tensions.
