European stock futures higher; U.K. CPI cools sharply

European stock markets are expected to open higher Wednesday, continuing the prior session’s strong gains as investors digested data showing cooling U.S. inflation as well as Chinese economic resilience.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. rose 0.3%.

Chinese economic recovery helps tone

The main European equity indices followed Wall Street higher on Tuesday, with the DAX in Germany gaining 1.8% and France’s CAC 40 up 1.4%, as weak U.S. inflation data raised hopes that the Federal Reserve has reached the peak in its interest rate-hiking cycle.

Fed officials, including Chair Jerome Powell, had recently adopted a hawkish tone over inflation, so the surprise move in the opposite direction in the monthly CPI figure had a dramatic effect.

This positive tone is set to continue Wednesday, helped by welcome economic news from China.

Data released earlier in the session showed that China’s industrial output grew at a faster pace than anticipated and retail sales growth beat expectations, an encouraging sign for the world’s second-largest economy, and a major export market for many of Europe’s largest companies.

Additionally, China’s central bank poured liquidity into the banking system earlier Wednesday, a move aimed chiefly at shoring up sluggish economic growth by encouraging more lending.

U.K. inflation falls sharply

Back in Europe, the positive news continued as British inflation fell sharply in October, admittedly mainly due to falling energy prices.

The headline annual figure dropped to 4.6%, from 6.7%, the prior month, the first time below 5% since 2021. The monthly release was flat, a considerable cooling from the 0.5% growth seen in September.

There are French and Italian inflation figures to also digest later in the session, while eurozone industrial production is expected to have contracted sharply in September.

Renault sets out targets for Ampere

In the corporate sector, chipmaker Infineon (OTC:IFNNY), troubled energy company Siemens Energy (ETR:ENR1n) and U.K. insurer Aviva (LON:AV) are set to post earnings during the session.

French car maker Renault (EPA:RENA) set out the financial targets for its electric vehicles unit Ampere, which it plans to list on the market next year.

“We are not going to give it away,” said Renaut executive Thierry Pieton, adding the company had ample cash flow to keep financing it if it did not get the valuation it wanted for an IPO.

Crude boosted by Chinese economic data

Oil prices rose Wednesday, buoyed by the signs of cooling U.S. inflation and economic resilience from China, the world’s largest crude importer, ahead of the release of the latest U.S. oil inventory data.

By 02:00 ET, the U.S. crude futures traded 0.6% higher at $78.60 a barrel, while the Brent contract climbed 0.6% to $82.94 a barrel.

The U.S. Energy Information Administration will release its first oil inventory report in two weeks in the session, after a systems upgrade last week. Industry data from the American Petroleum Institute released on Tuesday pointed to a weekly build of just over one million barrels in inventories.

Additionally, gold futures rose 0.3% to $1,973.10/oz, while EUR/USD traded 0.1% lower at 1.0874.