European equities traded cautiously higher on Thursday, as investors balanced political and economic risks in the region with anticipation of key central bank decisions and upcoming U.S. inflation data.

At 03:05 ET (07:05 GMT), Germany’s DAX rose 0.1%, France’s CAC 40 gained 0.3%, and the U.K.’s FTSE 100 added 0.3%.

ECB Meeting in Focus

Markets turned their attention to Frankfurt as the European Central Bank prepared to conclude its policy meeting. The ECB is widely expected to keep rates unchanged at 2%, after halving them earlier this year to stabilize growth as inflation returned to target.

However, uncertainty stemming from U.S. President Donald Trump’s 15% tariffs on European imports, weak growth momentum, and renewed political turmoil in France suggest policymakers may keep the door open to future easing. ECB President Christine Lagarde is unlikely to signal immediate changes but could emphasize flexibility as inflation is projected to dip below target in 2026.

U.S. CPI Data Looms Large

Investors are also awaiting fresh U.S. inflation readings, which could influence the scale of next week’s expected Federal Reserve rate cut.

Markets expect August’s headline CPI to rise 2.9% year-on-year, the fastest pace since January, while the core rate is projected to remain at 3.1%. A soft print could reinforce bets of a 50-basis-point cut, although a 25-bps move is already fully priced in.

Corporate and Sector Highlights

On the corporate side, Energean signed over $4 billion in long-term gas supply contracts in the first half of 2025, boosting its contracted revenues outlook.

Energy stocks were mixed as oil prices slipped after data showed a sharp U.S. inventory build. Brent futures fell 0.1% to $67.41 per barrel, while WTI crude dipped 0.2% to $63.57 per barrel.

The Energy Information Administration reported a 3.9 million barrel build in crude stocks for the week ending September 5, compared with expectations for a draw. Gasoline inventories also rose unexpectedly, stoking concerns that demand in the world’s largest energy consumer is slowing as summer travel winds down.