Eurostoxx futures +0.2% in early European trading

Eurostoxx futures have risen by 0.2% in early European trading, alongside a similar increase in German DAX and French CAC 40 futures. The UK FTSE futures show an even larger increase of 0.3%. This uptick comes after modest declines observed yesterday, where the overall sentiment remains mixed within the Wall Street environment. Tech stocks led the charge with the Nasdaq closing up 0.2%, while the Dow fell by 0.6%. Market players continue to grapple with the narrative surrounding AI, causing some fluctuations in risk sentiment. Today, however, the mood seems steadier as US futures also show slight increases. The S&P 500 futures are noted to be up 0.1% as the session progresses. Key risk events within the economic calendar, including the UK’s CPI report for November, have already been tackled. The inflation numbers were softer than expected, which may assist the BOE in considering a rate cut this week. Nonetheless, it may be premature to promote the narrative of a significantly stronger disinflation trend due to persistently high services inflation. Thus, I wouldn't expect traders to get overly enthusiastic about pricing in faster rate cuts by the BOE, potentially limiting declines in the pound for the day. The GBP/USD scenario could be more complex, considering the dollar is expected to remain firm against other currencies during the morning trade in Europe.