BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening higher on Wednesday as July U.S. CPI inflation data suggested little impact from President Trump's tariffs, reinforcing bets the Federal Reserve will cut interest rates to support a cooling labor market.
Traders are currently pricing in a 94 percent chance the Federal Reserve will cut interest rates in September, up from nearly 86 percent a day ago, according to the CME FedWatch tool.
Investors also await Friday's meeting between Trump and Russian President Putin that could result in a cease-fire in Ukraine and even a potential easing of sanctions against Russia.
On the economic front, German final consumer price index for July and U.K. RICS housing survey results for July may garner some attention later in the day.
Across the Atlantic, it's a quiet day ahead before the release of several key reports in the latter part of the week.
Asian markets were mostly higher this morning, with Hong Kong and Japan leading regional gain.
The dollar and Treasury yields were little changed while gold held steady at $3,350 per ounce.
Oil edged up slightly after falling in the previous session as industry data showed U.S. crude stockpiles increased last week.
U.S. stocks rose sharply overnight as in-line inflation data reinforced expectations that the Federal Reserve will cut interest rates soon.
Annual consumer price inflation held steady from the previous month at 2.7 percent in July, while economists had expected the pace of growth to tick up to 2.8 percent.
Core inflation, which excludes volatile food and energy prices, came in a tad higher than anticipated at 3.1 percent.
The tech-heavy Nasdaq Composite surged 1.4 percent and the S&P 500 rallied 1.1 percent to reach new record closing highs while the Dow climbed 1.1 percent.
European stocks closed broadly higher on Tuesday after the U.S. extended its pause on higher tariffs for Chinese goods until November 10, averting an immediate escalation in the trade war.
The pan European STOXX 600 gained 0.2 percent. The German DAX dipped 0.2 percent, while France's CAC 40 added 0.7 percent and the U.K.'s FTSE 100 edged up 0.2 percent.
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