European Shares Set For Steady Opening As Inflation Worries Ease

european market 021219 27jun22 lt

European stocks are seen opening on a steady note Monday as inflation expectations eased slightly, helping yields in the Treasury market recede.

Treasury yields remained subdued and the dollar held near the lowest in more than a week, while oil extended Friday's gains as investors looked ahead to the G7 meeting this week for possible moves on Russian oil exports.

G7 will also discuss the prospect of reviving the Iran nuclear talks after two Iranian and European officials said that two issues including one on sanctions remained to be resolved.

This week's OPEC+ meeting should be a non-event as analysts widely expect the producing countries including Russia to stick to a plan for accelerated output increases in August.

Asian markets were sharply higher as inflation worries eased and data showed profits at Chinese industrial firms shrank at a slower pace last month.

China's economy could see a strong rebound in the second half, "but difficulties remain for the 5.5 percent target," Wang Yiming, an adviser to the monetary policy committee of the People's Bank of China (PBOC) said in a statement.

On Saturday, the central bank advisor said that the country could consider trying to boost the economy by introducing special national bonds that don't count as financial deficits.

The final GDP growth estimates for the U.S. and the U.K for the first quarter of 2022 are set to be released on Wednesday and Thursday, respectively.

U.S. stocks rose sharply on Friday to snap a three-week losing streak, as housing data surprised on the upside and a widely followed consumer sentiment survey showed a slight easing of inflation expectations.

The Dow climbed 2.7 percent to cap its first weekly advance since May despite a pair of U.S. central bankers supporting further sharp interest rate hikes to stem rapid price rises. The tech-heavy Nasdaq Composite surged 3.3 percent and the S&P 500 added 3.1 percent.

European stocks also posted strong gains on Friday despite a batch of weak economic data. The pan European Stoxx 600 surged 2.6 percent, logging its best single-day gain in more than three months.

The German DAX rallied 1.6 percent, France's CAC 40 index climbed 3.2 percent and the U.K.'s FTSE 100 advanced 2.7 percent.

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