Bullish sentiment which could have been seen at the European opening has evaporated to some extent. Even as the outlook for the global economy seems to be improving, stock investors might take time to change make up their minds what a tighter policy could really mean for their investment portfolios.

For many months the one and only central bank that could rise interest rates was the US Fed. For better or worse it seemed like the greenback had no alternative as the currency pushed above multi-year highs. But things have changed. While other central banks are beginning tighten their rhetoric the USD continued its decline during Asian session

The shared currency rally continues after first inflation prints from Germany and Spain showed that an improvement in inflation could be expected this month. In Spain, consumer prices were flat in June on an EU-harmonised basis, which brought the country’s annual inflation rate down from 2 per cent to 1.6 per cent. The decline was driven mostly by changes in fuel prices. That was a bit better than consensus forecasts of 1.5 per cent, but still marked the weakest figure since November.

Even as European stocks have started the day with decent gains, those have been parred over time. Lack of determination in further gains could stem from the more hawkish attitude presented by global central banks. Needless to say, the higher rates, the less incentive to put money into risky assets.

Looking ahead, there will be German CPI inflation data which could substantially affect the euro. Besides, there is a few prints from the US economy. Moreover, China will unveil its PMI data overnight. There is no doubt that kind of releases are always worth looking at.