European markets start the week while investors wait for important US data

LONDON – European equities are expected to open in positive territory on Monday as global markets look at key US inflation data this week and more comments from US Federal Reserve Chairman Jerome Powell on interest rate hikes.

The UK FTSE index is set to open 16 points higher at 7,490, Germany’s DAX 12 points higher at 15,946, France’s CAC 40 up 16 points higher at 7,223 and Italy’s FTSE MIB 26 points higher at 27,463, according to data from IG.

Global markets have a busy week ahead with the latest US inflation data as an important data point this week. The US consumer price index is set for release on Wednesday and the producer price index is set for Thursday.

Consumer prices have risen in Europe and the United States in recent months. Last Friday, inflation in the eurozone hit a new record high in December, by 5% compared to the same month last year.

In addition, investors will look for more comments on the timing of upcoming interest rate hikes from Powell, as the Fed leader is scheduled to testify Tuesday in his nomination hearing for a Senate panel.

The Fed has signaled that it can repel its simple monetary policy more aggressively than anyone expected. Minutes from the Fed̵[ads1]7;s December meeting, which was published last Wednesday, showed that the central bank plans to shrink the balance sheet in addition to raising interest rates.

The markets will keep an eye on the security talks between US and Russian diplomats in Geneva on Monday aim to de-escalate tensions around Ukraine.

On the data front in Europe on Monday, the eurozone publishes its latest unemployment figures for November, the Netherlands publishes production data for November and Italy publishes its industrial sales figures for the same month.

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