European markets rebound after Wall Street rally; ECB ‘jumbo’ rate hike a possibility
European markets opened higher Thursday following a rebound on Wall Street that lifted global sentiment.
The pan-European Stoxx 600 was up 0.17% at midday CET, though sectors including utilities, autos and chemicals were in the red. Retail stocks led losses with a 1.75% fall.
The European Central Bank is in focus today, with the central bank due to announce its latest monetary policy moves. It’s expected to frontload a series of rate hikes and sacrifice growth in the region in light of the rising cost of living, which is threatening to surge even higher.
With inflation in the euro zone projected to rise to at least 10% in the coming months and the risk of consumer prices rocketing higher, a “jumbo” rate hike of 75 basis points on Thursday is a possibility.
Markets in Asia-Pacific were mixed following Wall Street’s solid rebound rally overnight in the best day since Aug. 10 for all three averages.
Investors will also be closely watching U.S. Federal Reserve Chair Jerome Powell’s speech Thursday as markets brace themselves for another 75 basis-point hike later this month.
European stocks are expected to open cautiously higher on Wednesday with the U.K.’s FTSE index seen 18 points higher at 7,560, Germany’s DAX 33 points higher at 13,944, France’s CAC 40 up 18 points at 6,616 and Italy’s FTSE MIB up 42 points at 23,029, according to data from IG.
Data releases include preliminary euro zone unemployment data for the second quarter as well as second quarter gross domestic product. The latest U.K. inflation numbers for July will be released as well as preliminary second quarter Dutch GDP.
Earnings come from Uniper, Carlsberg, Persimmon, Balfour Beatty, BAT and National Grid.
