European Markets Poised for Gains as Global Markets Watch Inflation
European stock futures point to a strong opening on Thursday, as investors digest American economic data during the Thanksgiving holiday lull. Trading is expected to be subdued with US markets closed, but a key focus remains on inflation, recent technological dips, and potential for rising yields in France.
## Optimism Mixed With Cautious Leaders
The CAC 40 [PARIS] is expected to rise by 0.3%, with smaller expected increases for London’s FTSE and Frankfurt’s Dax.
Inflationary pressures remain on investors’ minds following data released Wednesday showing PCE inflation ticking up in October.
“This inflation figure shouldn’t change anything. ‘+’ While core inflation is stalling in its progress towards the 2% target, “it is no longer at real inflation danger zones for the Fed,” explains Bastien Drut, Head of Strategy and Economic Studies at CPR AM.
Quiet Trading Expected Ahead of Another Crucial Data Release
Still, the quiet trading days ahead of the upcoming release of November’s German inflation data add uncertainty.
French assets could see continued volatility, as the gap between French and German rates has reached a 12-year high, adding to concern around political instability in France.
## Wall Street Ends Down as Tech Weakness Continues
Yesterday, the New York Stock Exchange closed lower ahead of the Thanksgiving break.
The Dow Jones fell 0.31%, closing at 44,723.23 points, while the S&P 500 edged down 0.38% to finish at 5,998.78 points, and the Nasdaq Composite weakened 0.59%, closing at 19,061.78 points.
Anxiety in the tech sector was particularly pronounced, with computer makers Dell and HP Inc tumbling 12% and nearly 6% respectively, adding to worries over a rebound in PC demand. Artificial intelligence may further impact the demand projections.
## Asian Markets See Gains
Asian markets saw mixed results on Thursday. By contrast, the Tokyo Stock Exchange gained 0.56%, and the broader Topix rose 0.82%. Particularly, shares of ‘.. Hangzhou-based electronics giant Tokyo Electron surged 6.7%
However, Chinese markets generally retreated on concerns over a potential escalation in trade tensions. In Hong Kong, the Hang Seng Index lost 1.34%, and mainland markets also leaned lower. The news followed reports of slumping PC sales in Capitals of Europe
## Dollar Strengthens Ahead of Key Releases
The dollar is stronger as investors analyze recent data, showing persistent inflation. The dollar endured a rise of 0.17% against leading currencies, with the euro easing by 0.15% against the dollar, reaching 1.0548, and the pound sterling also down 0.17% to 1.2657
Crudeinventories rose by 3.3 million barrels last weak, according to theEnergy Information Administration, putting downward pressure on oil prices. Brent crude fell 0.05% to 72.79 per barrel, while West Texas Intermediate moved down 0.1% to 68.65 raffinode
How could the release of the November German inflation data impact European markets?
## Interview: European Markets Eye German Inflation Data
**Interviewer:** Bastien, thanks for joining us today. European markets are predicted to open higher tomorrow, but there’s a lot of cautious optimism in the air. What are you seeing?
**Bastien Drut:** It’s a mix of relief and anticipation, really. We saw a slight uptick in US PCE inflation, but it’s not enough to drastically change the Fed’s trajectory. [[1](https://www.reuters.com/markets/europe/investors-euro-zone-inflation-expectations-fall-below-2-first-time-since-2022-2024-11-26/)]
While core inflation in the Eurozone is still moving towards that 2% target, it’s not in a danger zone anymore. Investors are taking that as a positive sign.
**Interviewer:** But there’s still a lot of uncertainty, isn’t there?
**Bastien Drut:** Absolutely. We’re in a lull before the release of the November German inflation data. That figures is going to be crucial. If it shows inflation is cooling more rapidly than anticipated, we could see a bigger boost for European markets.
**Interviewer:** What about France? We’ve been seeing some volatility there lately.
**Bastien Drut:** Yes, France is a bit of a wildcard. There are concerns about rising bond yields, which could put pressure on French assets.
**Interviewer:** So, a cautious outlook for now?
**Bastien Drut:** Definitely. We’ve got a mixed bag of signals at the moment. Positive momentum from the US, tempered by inflation concerns and French uncertainty.
European markets are poised for gains, but the extent of those gains will likely depend on how the German inflation data plays out.