By Peter Nurse
Investing.com - European stock markets traded higher ahead of key Eurozone inflation data, but sentiment remains fragile amid uncertainty over China’s COVID policies.
At 03:50 ET (08:50 GMT), the DAX index in Germany traded 0.4% higher, CAC 40 in France traded up 0.3% and the FTSE 100 in the U.K. gained 0.3%.
French inflation unexpectedly remained at a record high in November, with harmonized consumer prices in the Eurozone’s second-largest economy rising 7.1% from a year earlier, matching October’s increase, defying a slowdown in other parts of the currency bloc.
Inflation numbers out of Germany and Spain had both fallen short of expectations on Tuesday, raising hopes that inflation had peaked earlier than expected.
This puts the Eurozone CPI release for November, due later in the session, firmly in the spotlight, with investors looking for signs that the record rise in inflation in the region has peaked.
This is expected to come in at 10.4% on an annual basis, down from 10.6% the prior month.
Elsewhere, investors will keep a wary eye on events in China after gains on Tuesday on rumors that Beijing planned to scale back its zero-COVID policy after civil unrest, even though the government has yet to confirm this intention.
Federal Reserve chairman Jerome Powell is also scheduled to speak later Wednesday, and his comments will be carefully studied for more cues on future U.S. monetary policy.
In corporate news, H&M (ST:HMb) stock rose 0.3% after the world’s second largest fashion retailer said it will cut some 1,500 jobs as part of its cost cutting drive.
Mulberry (LON:MUL) stock slumped 15% after the luxury handbag maker reported a half-year loss, with sales hard hit across the U.K. as soaring inflation cut discretionary spending.
Rio Tinto (ASX:RIO) (LON:RIO) stock fell 0.2% after the mining giant published conservative output forecasts for 2023.
Crude oil prices rose Wednesday, boosted by an industry report showing falling U.S. crude inventories, although caution ahead of the weekend’s OPEC+ meeting limited gains.
Data from the American Petroleum Institute, released Tuesday, showed that U.S. crude stocks shrank by a much bigger-than-expected 7.9 million in the past week, suggesting that the U.S. government has likely scaled back its drawdowns from the Strategic Petroleum Reserve.
If confirmed by the official government release later Wednesday, this would point to tighter supply conditions in the U.S., the world’s largest consumer of crude.
However, these gains have been tempered by a Reuters report stating that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is likely to keep oil output policy unchanged at a meeting on Sunday.
Hopes had risen earlier in the week that the group of top producers would agree to a production cut in order to support prices, which at the time had fallen to their lowest levels this year.
By 03:50 ET, U.S. crude futures traded 0.7% higher at $78.73 a barrel, while the Brent contract rose 0.7% to $84.87.
Additionally, gold futures rose 1.4% to $1,772.10/oz, while EUR/USD traded 0.4% higher at 1.0365.