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Title: European Stock Futures Higher; Weaker U.S. CPI Boosts Sentiment

Aug 11, 2022 01:44AM ET

By: AnalysisWatch

European stock markets are expected to open higher Thursday, boosted by strong gains on Wall Street overnight after weaker-than-expected U.S. inflation eased the pressure on the U.S. Federal Reserve to aggressively tighten monetary policy.

At 2 AM ET, the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. rose 0.2%.

European equities closed higher Wednesday and are expected to continue rallying on Thursday following the positive lead from Wall Street, after the blue chip Dow Jones Industrial Average closed up over 500 points, or 1.6%.

Investors are now pricing in a 50 basis point hike by the Fed in September, down from earlier expectations of a 75 basis point hike.

The earnings season continued in Europe Thursday, with Deutsche Telekom (OTC:DTEGY) in the spotlight after the communications giant lifted its annual outlook for the second time and posted quarterly core profit above estimates on Thursday, supported by an upbeat performance in its U.S. unit T-Mobile.

Zurich Insurance (SIX:ZURN) reported a better-than-expected 25% rise in operating profit to $3.39 billion in the first half, with both its property and casualty and its life businesses outperforming.

Oil prices edged lower Thursday after a sharp rise in U.S. crude stocks and as concerns over supply disruptions eased.

U.S. crude inventories rose by 5.5 million barrels in the most recent week, according to data from the Energy Information Administration, more than the expected increase of 73,000 barrels.

This is the second straight week of an unexpectedly large rise in U.S. oil stocks, suggesting weakening demand at the world’s largest consumer.

Also weighing was the resumption of flows through a key European pipeline, from Russia along the southern Druzhba network, as a payment dispute was resolved.

By 2 AM ET, U.S. crude futures traded 0.1% lower at $91.80 a barrel, while the Brent contract fell 0.1% to $97.34.

Additionally, gold futures fell 0.7% to $1,801.50/oz, while EUR/USD traded 0.1% lower at 1.0285.

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