European Shares Seen Tad Higher At Open

European stocks may open a tad higher on Thursday despite persistent uncertainty over inflation and interest rates.

Asian markets followed Wall Street lower, though Chinese and Hong Kong stocks bucked the trend to post strong gains on optimism about China’s economic growth rebounding from reopening drive.

Gold traded a tad higher on a weaker dollar as investors awaited more economic data for guidance on future rate hikes.

U.S. weekly jobless claims data, an indicator of the state of the labor market, will be released later in the day while a reading on consumer sentiment that includes readings on inflation expectations will be out on Friday.

Focus is also on U.S. consumer price index inflation data due next week after several Federal Reserve officials stressed the need to keep raising interest rates.

Inflation remains elevated but there are encouraging signs that supply-demand mismatches were easing in many sectors of the economy, U.S. Treasury Secretary Janet Yellen said on Wednesday.

Oil prices were little changed in Asian trading after a three-day rally.

U.S.-China tensions remained on investors’ radar despite U.S. President Joe Biden saying the United States is not looking for conflict with China.

U.S. stocks fell overnight after New York Fed President John Williams said interest rates may need to be kept at an elevated level for a “few years” to bring down inflation.

Governor Christopher Waller warned of interest rates going higher than expectations while Governor Lisa Cook said the big job gains in January with moderating wage growth increased her hopes for a “soft landing”.

The Dow slipped 0.6 percent, the S&P 500 dropped 1.1 percent and the tech-heavy Nasdaq Composite tumbled 1.7 percent.

European stocks ended Wednesday’s session broadly higher following Fed Chair Jerome Powell’s comments that inflation has started easing.

The pan European STOXX 600 gained 0.3 percent. The German DAX rose 0.6 percent and the U.K.’s FTSE 100 added 0.3 percent, while France’s CAC 40 index eased 0.2 percent.

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