European Shares To Open On Sluggish Note Amid Fed Worries

European stocks may open on a subdued note Wednesday as stronger-than-expected U.S. inflation data poured cold water on investor hopes for an imminent interest-rate cut by the Federal Reserve.

Asian markets followed Wall Street lower, the dollar hovered near three-month highs and bond yields climbed on fears that the Fed will keep interest rates higher for longer.

The Japanese yen weakened past the 150 level to the dollar for the first time since late November, prompting the strongest pushback from Japanese officials in months.

In economic releases, consumer and producer price data from the U.K. and revised GDP figures from the euro area are awaited later in the day.

The U.S. economic calendar remains light today ahead of an avalanche of data on Thursday.

Gold hovered near a two-month low below the key $2,000 per ounce level while oil prices were mixed after industry data showed a substantial build in U.S. crude stockpiles.

U.S. stocks tumbled overnight while Treasury yields spiked as hotter-than-expected inflation data for January damped hopes of early and deeper Fed rate cuts this year.

Data showed the annual rate of consumer price growth slowed to 3.1 percent in January from 3.4 percent in December. Economists had expected the pace of growth to slow to 2.9 percent.

The annual rate of core consumer price in January came in unchanged from the previous month at 3.9 percent versus expectations for a decline to 3.7 percent.

The Dow and the S&P 500 both fell around 1.4 percent while the tech-heavy Nasdaq Composite plummeted 1.8 percent.

European stocks fell notably on Tuesday as investors assessed regional economic data, a slew of corporate earnings and the higher-than-expected U.S. CPI reading.

The pan European STOXX 600 lost 1 percent. The German DAX shed 0.9 percent, while France’s CAC 40 and the U.K.’s FTSE 100 both dipped around 0.8 percent.

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