By Peter Nurse
Investing.com - European stock markets are expected to open in a subdued manner Monday, as investors await regional inflation data to provide clues on the near-term path of interest rates.
At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France climbed 0.1%, while the FTSE 100 futures contract in the U.K. fell 0.1%.
European equities ended sharply lower last week following the negative lead on Wall Street after data showed the Fed’s preferred inflation gauge grew more than expected in January, providing the U.S. central bank with more headroom to keep raising interest rates.
There are no major European data releases due on Monday, but preliminary February data from Germany, France and Spain are due on Tuesday and Wednesday, followed by the flash number for the whole euro area on Thursday.
Another 50-basis point rate hike at the European Central Bank's upcoming meeting in mid-March is widely expected, but what follows is uncertain and thus this week’s data will be closely watched.
The markets are currently pricing in another 75 basis points of moves in the Eurozone before the end of the summer.
Elsewhere, investors will also keep an eye on rising tensions between the U.S. and China, after Washington warned Beijing of serious consequences if it provided arms to support Russia's invasion of Ukraine.
Back in Europe, U.K. Prime Minister Rishi Sunak is set to meet European Union chief Ursula von der Leyen later in the session in an effort to finalize a new deal for Northern Ireland's trading arrangements following Britain’s departure from the union.
In the corporate sector, earnings are due from Bunzl (LON:BNZL) and ACS (BME:ACS) on Monday, while the week will also see numbers from the likes of Lufthansa (ETR:LHAG), London Stock Exchange Group (LON:LSEG) and Telefonica (BME:TEF).
Oil prices fell Monday, weighed by a stronger dollar after U.S. inflation data last week raised concerns that the Federal Reserve will maintain a hawkish stance for longer than previously expected.
A firm dollar makes commodities, like oil, priced in the U.S. currency more expensive for foreign buyers.
Adding to the headwinds, U.S. crude oil inventories surged to the highest level since May 2021 last week, data from the Energy Information Administration showed.
By 02:00 ET, U.S. crude futures traded 0.6% lower at $75.89 a barrel, while the Brent contract fell 0.7% to $82.28.
Additionally, gold futures fell 0.1% to $1,814.85/oz, while EUR/USD traded 0.1% lower at 1.0541.