European markets await U.S. inflation data, European Central Bank meet

LONDON — European stocks are expected to open slightly higher on Thursday as global markets gear up for the latest inflation reading from the U.S.

The data is crucial as it could help determine the Federal Reserve’s schedule for raising interest rates or tapering its asset purchase program.

London’s FTSE is seen opening 8 points higher at 7,087, Germany’s DAX 9 points higher at 15,601, France’s CAC 40 up 5 points at 6,571 and Italy’s FTSE MIB 4 points higher at 25,722, according to IG.

Global markets are predominantly focused on the U.S. inflation data due out Thursday; shares in Asia-Pacific edged higher in Thursday morning trade and futures contracts tied to the major U.S. stock indexes rose during the overnight session Wednesday evening as investors eyed the inflation report.

The Labor Department is scheduled to publish its consumer price index data at 8:30 a.m. ET on Thursday. Economists polled by Dow Jones expect the May CPI report to show prices up 4.7% year over year after April’s increase of 4.2%.

The Federal Reserve has been trying to gauge if higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.

For weeks, investors have been worried whether a rash of inflation could prompt the Fed to curb the pace of its asset purchases or begin to signal an increase to interest rates. Still, some say those fears are premature and that the central bank will give markets plenty of time before it makes any moves.

Investors in Europe are also gearing up for the next meeting of the European Central Bank on Thursday, with most expecting the central bank to keep its foot on the stimulus pedal.

Many believe the ECB will keep to its current path due to an uncertain economic outlook and to avoid an unwanted tightening of financial conditions.

Read more: European Central Bank expected to keep stimulus flowing despite inflation concerns

At Thursday’s meeting, the ECB will also update its quarterly staff projections for inflation and growth, alongside its traditional rate decision and press conference. The interest rate decision is announced at 12:45 pm London time.

In other news, U.K. Prime Minister Boris Johnson will meet his U.S. counterpart Joe Biden on Thursday ahead of the start of the Group of Seven summit in Cornwall that begins on Friday.

Earnings come from Manchester United and Ted Baker.

– CNBC’s Thomas Franck and Annette Weisbach contributed to this market report.