European stock markets rose on Wednesday (15/1), ahead of the release of highly influential monthly U.S. inflation data, after U.K. consumer prices showed signs of easing. At 3:05 a.m. ET (08:05 GMT), Germany's DAX index was up 0.3%, France's CAC 40 was up 0.3% and the U.K.'s FTSE 100 jumped 0.7%. Investors are awaiting the release of fresh U.S. consumer price data, later in the session, as it could potentially change expectations for future monetary policy from the Federal Reserve.

Markets have pushed expectations for the Fed's next interest rate cut into June after an unexpectedly strong jobs report earlier this month. Economists expect December's CPI to show a 2.9% year-over-year increase, a 0.4% increase on a monthly basis, while the core measure, which excludes volatile food and energy components, is forecast to rise 0.3% on a monthly basis, a 3.3% increase on an annual basis.

While the Fed is confident that inflation has moderated enough to start cutting interest rates in September, the annual pace of inflation remains above the Fed's 2% target. U.S. producer price data for December was surprisingly subdued on Tuesday, with the core measure remaining flat on the month.

In Europe, U.K. inflation unexpectedly slowed to an annual rate of 2.5% in December from 2.6% in November, while the core measure of inflation fell more sharply. The Bank of England announces its next interest rate decision on Feb. 6, and a cooling in inflation could persuade policymakers to cut rates again, especially after yields on U.K. government debt recently jumped to a 16-year high amid concerns about the U.K.'s fiscal health under Chancellor Rachel Reeves. (AL)

Source: Investing.com