Investors prepare for the start of the European quarterly earnings season, which will focus on the retail sector.

European stock markets are anticipated to open slightly higher in Wednesday session as investors prepare for the start of the region's quarterly earnings season, which will focus on the retail sector.

European corporate results begin on make a start today, with J Sainsbury and JD Sports reporting quarterly results.

Consumer demand is projected to weaken in 2023 as GDP in several European economies slows.

The Bank of England has already stated that the UK economy is in recession, while the World Bank has reduced its prediction for global growth this year to 1.7% from 3% in June.

With a growth rate of 1.7%, this year would be one of the slowest in three decades.

In other news, Swiss chemicals firm Sika announced a 13.4% increase in full-year revenue, as new facility openings and acquisitions helped the business achieve its aim of CHF 10 billion ($1 = CHF 0.9211) in annual sales for the first time.

Bayer will also be in the limelight after Bloomberg revealed that activist investor Bluebell Capital Partners has established a stake in the German pharmaceutical and agribusiness conglomerate and is lobbying for its dissolution.

The European economic calendar includes Spanish industrial output and Italian retail sales for November in today’s session, but the focus this week will be on the CPI report from the United States on Thursday.

The data is likely to show December headline inflation at 6.5%, down from 7.1% in November, giving the Federal Reserve space to moderate the pace of its interest rate rises in February.

In his address Tuesday, Fed Chairman Jerome Powell made no direct mention to the level of US interest rates, but he did indicate the US central bank is ready for political opposition as its efforts to reduce inflation damage GDP.

Oil prices dropped on Wednesday as a big increase in crude and fuel stocks in the United States rekindled demand concerns in the world's top consumer.

According to data released late Tuesday by the industry organisation American Petroleum Institute, U.S. crude oil stocks increased by 14.9 million barrels last week, instead of the predicted minor drop, while there appeared to be a tiny release of oil from the Strategic Petroleum Reserve.

The official inventory data from the United States Energy Information Administration is expected later in the session, and traders will be seeking for confirmation of this unexpected announcement.

(investing.com, reuters.com)