European stock markets showed cautious movement on Wednesday, treading water as traders awaited fresh U.S. inflation data and digested developments in the ongoing U.S. China trade dialogue.
Asian markets edged higher early in the session, buoyed by tentative optimism around trade negotiations in London. However, European equity futures pulled back slightly: EURO STOXX 50, FTSE, and DAX futures all declined amid investor uncertainty .
U.S. and Chinese officials reported agreement on a “framework” addressing strategic sectors particularly rare earths and magnets. While the progress eased some market nerves, no substantive details were released, leaving analysts doubtful about the scope and timing of any comprehensive agreement.
Treasury markets were flat ahead of key U.S. inflation figures, with the 10‑year yield at approximately 4.48%. A $39 billion auction of 10‑year notes later in the day added an extra layer of anticipation.
Currency markets remained subdued: the dollar hovered around ¥144.97 and $1.1417 per euro, reflecting a cautious interplay of global influences including trade dynamics and monetary policy.
Investors expect U.S. May CPI to show headline inflation up 0.2% and core inflation up 0.3% on a monthly basis translating to 2.5% and 2.9% year-over-year respectively. Any deviation could alter the Federal Reserve’s path on interest rates, shifting global sentiment.
Gold climbed roughly 0.6%, supported by a safe-haven bid amid macroeconomic jitters .
Oil prices eased slightly from near seven-week highs as markets anticipated U.S. stockpile data.
With key inflation data on tap, European investors remain poised. The consensus is that any hiccup in the U.S. CPI release could ripple through equity and bond markets. Additionally, while the U.S. China trade framework offers hope, markets are awaiting substantive policy details before staging a decisive move.
