European Shares Set For Tepid Start Ahead Of US Inflation Data

(RTTNews) - European stocks may open slightly lower on Wednesday as COVID-19 concerns return to the fore.

With the number of new cases rising by 30 percent globally in the last two weeks, World Health Organization's chief on Tuesday said that the pandemic is "nowhere near over".

Multiple cities in China have adopted fresh restrictions, casting uncertainty to the economic recovery in Q3.

Markets also remain wary of inflation risks ahead of the U.S. inflation reading for June due out later in the day.

Economists expect an acceleration in the annual rate of consumer price growth to 8.8 percent in June from 8.6 percent in May.

A high reading would add more pressure on the Fed to hike rates by another 75 basis points later this month on top of June's three-quarter point hike.

Closer home, GDP estimates and foreign trade data from the U.K. and final inflation figures from Germany and France are due later in the session, headlining a busy day for the European economic news.

Asian markets were seeing muted gains in cautious trade as the International Monetary Fund cut its growth forecasts for the U.S. economy this year and next.

Treasuries held steady and the euro hovered a whisker above parity on the dollar, while crude oil extended overnight losses to hover near $95 a barrel after U.S. inventory data showed build-ups in crude oil and refined products.

U.S. stocks ended lower overnight as investors braced for a big week of economic data and company earnings reports.

The S&P 500 gave up 0.9 percent to extend losses into a third day as Treasury yield inversion stoked recession worries. The Dow dropped 0.6 percent and the tech-heavy Nasdaq Composite lost 1 percent.

European stocks erased initial losses to close higher on Tuesday as the euro bounced back after almost reaching parity with the U.S. dollar.

The pan European Stoxx 600 gained half a percent despite weak regional data, concerns about a worsening energy crisis in Europe and the emergence of a new, more infectious Covid-19 strain in several parts of the world.

The German DAX rose 0.6 percent, France's CAC 40 index added 0.8 percent and the U.K.'s FTSE 100 edged up 0.2 percent.