Title: European Stocks Higher; German CPI Data Soars

Jun 14, 2022 02:00AM ET

By: AnalysisWatch

European equity markets are expected to open higher on Tuesday, rebounding to some extent after sharp losses in the previous session, but concerns remain that aggressive monetary tightening will hamper economic growth in the region.

German DAX index futures were up 1% at 2 a.m. ET, French CAC 40 index futures were up 0.9%, and UK FTSE 100 index futures were up 0.1%.

The European Central Bank confirmed late last week that it intends to begin a cycle of interest rate hikes in July and suggested that the next hike in September will depend on summer inflation data.

German consumer prices rose 0.9% on a monthly basis in May, according to data on Tuesday, after rising 0.8% in the previous month.

But they rose to 7.9% on an annualized basis from 7.4% in April, suggesting the ECB has a tough task ahead to control inflation in the euro zone's largest economy.

The Bank of England will also meet on Thursday. It is expected to continue its cycle of interest rate hikes, despite Monday's data on the decline in GDP in April.

Data released Tuesday showed another drop in the number of people claiming unemployment benefits in the U.K. by 19,700 in May, but average earnings rose 6.8% in April, illustrating the dilemma facing the central bank.

Oil prices stabilized Tuesday as traders continued to analyze new COVID cases in China and the prospect of further monetary tightening in the U.S., which could weigh on global growth.

By 2:05 a.m. ET, U.S. crude oil futures were trading 0.6% higher at $121.62 a barrel, while the Brent crude contract rose 0.6% to $123.02.

Gold futures fell 0.1% to $1,829.80/oz and the EUR/USD rose 0.2% to 1.0432.