European Shares May Open On Cautious Note

(RTTNews) - European stocks may open flat to slightly lower on Wednesday after a second straight month of stronger-than-expected inflation effectively shut the door on the possibility of a near-term rate cut by the U.S. Federal Reserve.

Markets now eagerly await U.S. producer price inflation and retail sales figures this week to gauge the Federal Reserve's potential path for interest rate cuts.

Traders also look ahead to the Federal Open Market Committee (FOMC) meeting on March 19 and 20 for signals of possible rate cut timings.

Asian markets traded mixed as China's property developer Country Garden Holdings missed bond payment and Toyota Motor Corp. met its labor union's wage demands in full, raising pressure on the Bank of Japan to raise interest rates as early as next week.

The dollar retained some overnight gains while held steady, after having fallen the most in a month in the previous session, tracking an upmove in Treasury yields to one-week highs.

Oil ticked higher in Asian trading on expectations of strong demand in the United States.

U.S. stocks rebounded overnight as inflation data largely met expectations, with CPI rising 0.4 percent on the month and 3.2 percent year-on-year in February. Core inflation came in at 0.4 percent versus forecasts for a 0.3 percent gain.

The tech-heavy Nasdaq Composite jumped 1.5 percent after two days of losses.

The S&P 500 rose 1.1 percent to a new record closing high and the Dow gained 0.6 percent.

European stocks closed on a buoyant note Tuesday as weak German inflation, U.K. unemployment and wage growth data spurred hopes of rate cuts by the European Central Bank and the Bank of England.

The pan European STOXX 600 advanced 1 percent. The German DAX climbed 1.2 percent, France's CAC 40 added 0.8 percent and the U.K.'s FTSE 100 rallied 1 percent.