European Shares To Open Higher On Rate Cut Expectations

(RTTNews) - European stocks are likely to open on a positive note Wednesday after Richmond Fed President Thomas Barkin suggested the U.S. central bank would lower interest rates if recent progress on inflation continued.

However, other policymakers including Chicago Fed President Austan Goolsbee and the Cleveland Fed's Loretta Mester have pushed back on expectations of rate cuts.

Atlanta Fed President Raphael Bostic said there was no urgency to lower rates.

Asian markets followed Wall Street higher, the dollar struggled for direction and Treasury 10-year yields slipped two basis points as investors awaited more U.S. data, including reports on consumer confidence and existing home sales later in the day for more clarity on the Fed's rate path.

Thursday's Q3 GDP print and Friday's durable goods orders and personal consumption expenditures — the Fed's preferred measure of inflation — will provide clues as to whether the Fed's battle against inflation is over.

Earlier today, China's central bank maintained its benchmark lending rates after the rate on medium-term lending facility, which acts as a guide to loan prime rates, was maintained at 2.50 percent last week.

Consumer and producer price figures from the U.K. and consumer sentiment survey results from Germany are awaited later in the day.

Gold consolidated its two-day upswing near $2,050 while oil was marginally lower after two days gains on fears of supply disruptions following recent attacks on ships by Houthi militants in the Red Sea region.

U.S. stocks closed higher overnight despite warnings from Fed officials trying to rein in expectations for aggressive rate cuts next year.

Investors shrugged off mixed data showing that housing starts surged by 14.8 percent in November, while building permits declined by 2.5 percent.

The Dow and the tech-heavy Nasdaq Composite both climbed around 0.7 percent to extend gains for a ninth consecutive session, while the S&P 500 rose 0.6 percent.

European stocks rose on Tuesday after Eurozone inflation came in unchanged at 2.4 percent in November, matching expectations.

The pan European STOXX 600 edged up 0.4 percent. The German DAX climbed 0.6 percent, France's CAC 40 finished marginally higher and the U.K.'s FTSE 100 advanced 0.3 percent.