Marketmind: More doom and gloom looms for Europe

© Reuters. FILE PHOTO: A employee arranges produce inside a Sainsbury’s supermarket in Richmond, west London, Britain, June 27, 2022. REUTERS/Henry Nicholls

A look at the day ahead in European and global markets from Alun John

Europeans will be hoping Wednesday’s economic data will provide some respite after a string of negative headlines, but past form suggests they’d be foolish to bet too much on it.

They might even be better off taking a punt on depressing figures, as at least their winnings might provide some small cheer if the bad news arrives.

British inflation data is due at 0600 GMT, and economists polled by Reuters expect it to show consumer prices rose by 9.8% in the 12 months to July, a further acceleration from the 9.1% rise reported for the 12 months to June.

That’s not good news for British workers who saw earnings for the second quarter adjusted for inflation fall by 4.1%, the biggest drop since records began in 2001, according to data released on Tuesday.

The final reading for Euro zone Q2 GDP is also due on Wednesday, and while preliminary data showed faster than expected growth, even then economists said it might be the economy's last hurrah.

If data from down under offers any clues, they aren’t great.

Earlier on Wednesday New Zealand’s Central Bank signalled a more hawkish tightening path over coming months to restrain stubbornly high inflation, even as it delivered its seventh straight interest rate hike, and Australian wage growth missed forecasts and lagged badly behind inflation.

The kiwi dollar initially climbed on the news before giving up its gains, though the Aussie held onto its losses.

Asian shares eked out small gains in morning trading, following overnight gains on Wall Street, where economic data is less depressing.

Japan was in the lead with the Nikkei up 1%, while MSCI’s broadest index of shares outside Japan rose just 0.2%.

Key developments that could influence markets on Wednesday:

UK Jul CPI, Jul PPI Euro zone Q2 flash employment, Q2 GDP US Jul retail sales US 20-year Treasury auction Fed Reserve releases minutes from July policy meeting at 1800 GMT New Zealand's central bank meeting and press conference. European earnings: Swiss Life, Carlsberg (OTC:CABGY), Uniper US earnings: Lowe’s (NYSE:LOW), Target (NYSE:TGT), Cisco (NASDAQ:CSCO)