BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may open a tad higher on Wednesday after Italy's Minister of Interior Matteo Salvini suffered a setback in his bid to hold an immediate no-confidence vote as the Senate postponed the debate until 20 August after a heated session.
Underlying sentiment, however, may remain cautious as traders digest a raft of disappointing data from China and keep a close eye on protests in Hong Kong and the latest developments in Argentina.
Asian stocks rallied as the Trump administration's decision to de-escalate its trade war with China helped outweigh data showing that China's industrial output growth slowed much more than expected in July.
China's industrial production grew at the slowest pace in 17 years in July as trade disputes with the U.S. dampened manufacturing activity. Moreover, retail sales growth eased further, reflecting weak domestic consumption.
Industrial output growth eased to 4.8 percent in July from 6.3 percent in June, the National Bureau of Statistics reported. Output was forecast to expand 6 percent.
Likewise, growth in retail sales slowed to 7.6 percent from 9.8 percent a month ago. This was the weakest growth in three months.
During January to July period, fixed asset investment logged an annual growth of 5.7 percent compared to 5.8 percent increase in January to June.
Property investment increased 10.6 percent in June to July period from the same period last year, slower than the 10.9 percent increase in the first half of the year.
Closer home, quarterly national accounts from Germany and inflation figures from the U.K. are due later in the session, headlining a busy day for the European economic news.
Eurostat will release euro area revised GDP and June industrial production data. The euro area economy is expected to grow 0.2 percent in the second quarter, as initially estimated. Economists expect industrial production to fall 1.4 percent sequentially in June.
The U.S. dollar traded flat against a basket of major currencies while oil prices erased some gains from the previous session after industry data showed U.S. crude inventories unexpectedly rose last week.
Overnight, U.S. stocks rallied after the Trump administration backed off on imposing tariffs on some Chinese imports from Sept. 1 and also removed certain products from the tariff list, citing health, safety, national security and other factors.
U.S. consumer prices increased broadly in July but that didn't change market expectations that the Federal Reserve will cut interest rates again next month.
The Dow Jones Industrial Average climbed 1.4 percent, the tech-heavy Nasdaq Composite jumped 2 percent and the S&P 500 surged 1.5 percent.
European markets reversed course on Tuesday to close higher on fresh hopes of U.S.-China truce.
The Stoxx Europe 600 index rose half a percent. The German DAX rose 0.6 percent, France's CAC 40 index climbed 1 percent and the U.K.'s FTSE 100 gained 0.3 percent.
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