European Stocks Edge Higher Amid Inflation Concerns Ahead of US Data
European stocks edged higher on Friday but remained under pressure as elevated bond yields and concerns over aggressive interest rate hikes weighed on investor sentiment ahead of key US inflation data. The pan-European STOXX 600 index rose 0.3% to 637.60 points by 0716 GMT, after closing at a two-month low in the previous session.
The European Central Bank raised interest rates as expected on Thursday but warned that inflation could rise further due to energy prices surging amid the prolonged conflict in the Middle East. Oil prices remained above $100 a barrel for a third consecutive day, adding to concerns over inflation and potential monetary policy tightening.
Investors are now focusing on US consumer price inflation data due later on Friday, which could offer fresh clues about the Federal Reserve's interest rate outlook ahead of its meeting next week. A stronger-than-expected reading could reinforce expectations for tighter monetary policy and put further pressure on equities, while softer data could ease concerns over future rate increases.