European Shares Seen Up On Improved China Inflation Data

European stocks are seen opening higher on Monday as investors react to improved inflation data from China.

China’s headline CPI inflation turned positive in August and the fall in the producer price index narrowed from July, showing some improvement in the country’s deflationary trend.

The improved inflation data was accompanied by more stimulus measures from the Chinese government to prop up China’s faltering housing market and allow insurance companies to invest more in blue-chip shares and tech stocks.

Asian markets traded mixed ahead of key U.S. data due this week that could have a significant impact on the outlook for interest rates.

This week will see the release of key U.S. reports on consumer and producer inflation as well as data on retail sales, industrial production and consumer sentiment.

The Federal Reserve is expected to leave interest rates steady later this month, while the odds for a November Fed rate hike have plunged to 43 percent.

U.S monetary policy is “in a good place,” but officials will need to parse through data to decide on how to proceed on interest rates, New York Fed President John Williams said on Thursday.

Elsewhere, the European Central Bank is expected to hold interest rates steady on Sept. 14.

The dollar traded weak, with the Japanese yen surging nearly 1 percent following potentially hawkish remarks by the Bank of Japan governor.

Gold ticked higher on dollar weakness while oil prices were a tad lower on concerns over the economic recovery in China.

U.S. stocks edged up slightly on Friday but closed the week lower on fears of further interest rate hikes this year.

The Dow rose 0.2 percent while the S&P 500 and the tech-heavy Nasdaq Composite both inched up around 0.1 percent.

European stocks closed slightly higher on Friday to snap their longest streak since February 2018.

The pan European STOXX 600 gained 0.2 percent. The German DAX inched up 0.1 percent, France’s CAC 40 gained 0.6 percent and the U.K.’s FTSE 100 added half a percent.

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