Investors closely watch EU inflation and Fed official’s speeches

European and US equity futures traded higher alongside the dollar while Chinese stocks and the offshore yuan fell following an inflation warning from China’s central bank. The muted gains for European and US contracts mirrored small advances for Japanese and Australian shares in mixed Asian trade on Thursday.

European equity futures will likely face a rough opening after declines in Asia and the US following the Fed's comments that had investors recalibrating bets on how the central bank intends to proceed.

During Thursday's foreign exchange market, G10 currencies were under pressure as better-than-expected U.S. retail sales boosted the dollar amid the prospect of more hawkish moves by the Fed while continuing COVID-19 outbreaks in China tempered sentiments towards the region.

A flurry of BOE and Federal Reserve policymakers will be speaking today, giving investors more clues to assess. Chancellor Jeremy Hunt is expected to announce several measures. On Thursday, as part of the upcoming data release in Europe, the highlight will be the latest release of the CPI figure for the Eurozone for October, which is forecast to confirm an annual rise of 10.7%, up 1.5% from the previous month. We will also receive figures on Dutch unemployment and Italian trade.

Retail sales growth in the US posted its highest month in eight months in October, exceeding estimates and indicating that the Fed has more to tighten before inflation is effectively stifled. There is no possibility of a pause in rate hikes, according to San Francisco Fed President Mary Daly. In addition, New York Fed President John Williams has stated that the central bank should refrain from taking financial stability risks into account as part of its considerations.

Since Federal Reserve officials have hinted that policy will be tightened further in the months to come, the yield on Treasury 10-year notes has been trending higher after dropping on Wednesday. During the past week, a closely watched section of the US yield curve remained near levels that have not been seen in four decades. This is a sign of investors' concern about the world's biggest economy.