European markets open lower ahead of key US inflation data and as US midterms begin.

FTSE 100 opened lower this morning after US markets finished higher yesterday, but still far behind best levels for the day ahead of key inflation data and as results from the US midterms begin to come in.

“US markets also had another good day, finishing higher for the 3rd day in a row, although well off the highs of the day with the gains being relatively modest, despite a fall in treasury yields with the markets trading relatively cautiously ahead of tomorrow’s CPI report”, said Michael Hewson, Chief market analyst at CMC.

Looking at the midterms, polls suggest that Republicans will take control of the House of Congress with having more seats in the House as well. From an investor’s perspective, a victory in both chambers from Republicans would be a good outcome for the stocks. Market analysts believe a divided government, which is likely, will be better for stock markets than a Democratic one.

In the UK stocks to watch today: Taylor Wimpey, Smith News, M&S, and Biffa.

Over in China, the stock market dropped 0.35% with Hong Kong’s Hang Seng index 1.5% lower, the Shanghai Shenzhen CSI 300 dropped 0.9%. This is as producer prices plunged for the first time since December 2020.

China is facing its worst Covid outbreak since May which has greatly affected investor sentiment towards the region. As a result, local markets are now unwinding the a bulk of gains made in the last week.

In Japan, the Japanese yen rose further to 145.51 versus the US dollar, gaining from its weakening. Not so long ago, Yen plunged to its weakest level since 1992 as the gap between US and Japanese interest rates broadens.

Key developments today:

• Crude oil inventories (15:30 GMT), analysts are forecasting 1.360M barrels.
• WASDE Report (17:00 GMT)

Earnings:

• TC Energy is set to report an EPS of $0.97 on revenue of $3.25 billion.
• Roblox is set to report earnings of -$0.2972 on revenue of $690 million.
• Rogers Communications is expected to report an EPS of $0.83 on revenue of $3.71 billion.  

(Sources: investing.com, reuters.com, proactiveinvestorsuk.com)