Title: European Stock Futures Higher; Key U.S. Inflation Data in Focus

May 11, 2022 02:02AM ET

By: AnalysisWatch

European equity markets are expected to open higher on Wednesday, rebounding from the recent broad sell-off ahead of the release of key US inflation data that could influence how aggressively the Federal Reserve raises interest rates.

At 2:05 AM ET, the DAX futures contract in Germany was trading 0.2% higher, CAC 40 futures in France climbed 0.7% and the FTSE 100 futures contract in the UK rose 0.4%.

European equities, following Wall Street's lead, have struggled of late, with the pan-European STOXX 600 index falling to two-month lows, on concerns that rising inflation will prompt central banks and the Fed, in particular, to boldly raise interest rates, increasing the likelihood of a global recession.

The US central bank raised interest rates by 50 basis points last week and signalled a series of cuts of this magnitude in the coming months.

However, there is also speculation that the Fed will need to raise interest rates by as much as 75 basis points at one meeting to combat inflation at levels not seen in 40 years.

With this in mind, the release of the US consumer price index for April, at 8:30 AM ET, will be the main event of the day. The index is expected to have fallen to 8.1% year-on-year from 8.5% a month earlier.

German CPI also rose 7.4% year-on-year in April, up from 7.3% and up 0.8% month-on-month, compared with a 2.5% rise in March.

In corporate news, tobacco giant Philip Morris (NYSE:PM) confirmed that it has made a recommended cash offer to buy Swedish tobacco and nicotine producer Swedish Match), valuing the Stockholm-listed company at around $16 billion.

German industrial conglomerate ThyssenKrupp will also be in the spotlight after beating second-quarter profit forecasts and raising its expectations, while results from the likes of Alstom Commerzbank Continental E.ON and Siemens Energy will also be examined..