European shares dipped on Thursday as investors awaited the release of U.S. inflation data and any new stimulus measures from China. The pan-European Stoxx 600 index was down 0.17% on the day. The German 10-year Bund yield, the Eurozone benchmark, nudged up to 2.28%, a five-week high.
Early market focus was on gains in China, spurred by hopes that an upcoming briefing would deliver anticipated fiscal stimulus. U.S. consumer price index (CPI) numbers are due at 1230 GMT. Economists polled by Reuters see U.S. core inflation holding steady at 3.2% year-on-year and 0.2% month-on-month.
At stake is whether we get one or two more Fed cuts this year, or none at all,” said Kenneth Broux, head of corporate research FX and rates at Societe Generale. He noted that the re-acceleration of U.S. growth in the third quarter and the tightening of the labor market in September “suggest disinflation may be stalling.”
The U.S. 10-year yield was up 3 basis points at 4.009%, its highest since late July. It has jumped 24 basis points in the past week, primarily due to unexpectedly strong payroll data.
European markets await US inflation data
That, in turn, has helped the dollar strengthen against the euro, yen, and pound. U.S. share futures were down around 0.2% on Thursday after the S&P 500 and the Dow both closed at record highs on Wednesday.
In Europe, the new French government was set to deliver its 2025 budget late on Thursday, with plans for 60 billion euros ($66 billion) worth of tax hikes and spending cuts to address a spiraling fiscal deficit. Chinese mainland shares got a lift early in the Asia session as China’s central bank kicked off its 500 billion yuan facility to spur capital markets, part of a series of stimulus measures announced in late September. China’s blue-chip CSI300 index closed up just over 1% despite the previous day’s 7% fall, triggered by concerns about the lack of details in the stimulus package.
Hong Kong’s Hang Seng surged over 3%, up 26% this year. The market’s attention is now firmly on a finance ministry press conference on Saturday that will provide details of the stimulus plan. In commodities, oil prices rose amid rising tensions in the Middle East, concerns over supply disruption, and increased demand due to a significant storm in Florida.
Brent Crude futures were 1.3% higher at $77.59 a barrel, while U.S. West Texas Intermediate (WTI) futures rose to $74.19 a barrel. Gold was 0.2% higher at $2,613 an ounce.
