European stocks set to open higher as markets assess inflation, trade news

LONDON — European stocks are expected to open higher on Wednesday as investors assess the latest trade news and inflation data.

The U.K.'s FTSE index is set to open 0.2% higher, with Germany's DAX up 0.46%, France's CAC 40 0.3% higher and Italy's FTSE MIB up 0.33%, according to IG data.

European markets will be focused on overnight reports that U.S. President Donald Trump asked the EU to hit China and India with tariffs of up to 100% over the countries' Russia oil purchases. The move seeks to turn up the heat on Moscow to end the war in Ukraine, but risks further destabilizing global trade relations.

Inflation data is also in focus for global markets with key prints out of China overnight, and set to come from the U.S. later Wednesday and tomorrow.

S&P 500 futures rose slightly overnight, as traders turned their attention to the release of the latest producer price index. The report comes ahead of Thursday's more closely watched consumer price index reading.

Economists expect the report to show monthly increases of 0.3% across the board, according to Dow Jones. If this materializes, it would push the annual headline CPI rate to 2.9%, while the core reading is expected to stay unchanged at 3.1%.

If these numbers come in around their estimates, the U.S. Federal Reserve to deliver another rate cut at its meeting next week.

Asia-Pacific markets meanwhile rose overnight, as investors assessed August inflation data out of China. Consumer prices in the mainland fell 0.4% year-over-year in August, according to data from the National Bureau of Statistics released Wednesday, compared with expectations of a 0.2% drop by economists polled by Reuters.

In Europe, earnings come from Inditex and Associated British Foods on Wednesday, while data releases include Spanish and Italian industrial production figures.

— CNBC's Nur Hikmah Md Ali and Jeff Cox contributed to this market report.