Investor relief as US rate hike expectations fade – business live

European markets are steady in early trading, with only small moves.

• FTSE 100: -0.03% at 7,411

• Germany’s DAX: -0.1% at 12,633

• France’s CAC: +0.03% at 5,237

• Italy’s FTSE MIB: -0.03% at 21,516

• Spain’s Ibex: +0.04% at 10,663

• Europe’s STOXX 600: +0.03% at 386

China’s leaders gather every five years to discuss ways to improve the financial system of the world’s second largest economy.

The next meeting of the National Financial Work Conference takes place today and tomorrow in Beijing and President Xi Jinping is expected to attend.

Items on the agenda are likely to include reining in financial risk, and giving the central bank a bigger role in overseeing other financial regulators.

Some background on the history of the meeting from Bloomberg:

The meeting has held a special place in China’s economic and political calendar since it was introduced to encourage more sustainable economic growth following the Asian financial crisis.

The first conference in 1997 saw the establishment of an insurance regulator and a plan to bail out China’s largest banks. The second led to the creation of a banking regulator and a drive to list major state-owned lenders on overseas stock exchanges.

The 2007 conference oversaw the creation of the sovereign wealth fund, China Investment Corp., which now has $813.5 billion of assets. The meeting in 2012 focused on the fallout from the global financial crisis.

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European markets are expected to follow Wall Street higher this morning as investors continue to digest the more cautious tone from Fed chair Janet Yellen.

A rate hike in December is no longer looking like a foregone conclusion after Yellen highlighted weak inflation as a factor weighing on the minds of policymakers.

Michael Hewson from CMC Markets explains:

The Dow Jones posted another record close, while the US dollar remained under pressure as markets adjusted to how the next moves on monetary policy might play out.

The prospect that further interest rate rises may well be much more gradual, if they happen at all, shouldn’t have been entirely unexpected given the risks involved in trying to withdraw stimulus and raise rates at the same time, nonetheless judging by the market reaction it appears to have gone down fairly well.

With that in mind, investors will be focused on the latest US inflation data, due at 13.30 UK time. It is expected to show consumer price inflation remained at a fairly subdued 1.7% in June.

US retail sales data for June will also be published at 13.30, and are expected to show the sector managed growth of just 0.1% last month, following a 0.3% drop in sales in May.

Traders at spread betting firm IG expect European markets to open higher: