Stocks in Europe anticipated to mostly decline ahead of US inflation figures

In the financial landscape, France faces growing concerns over a deepening political and fiscal crisis. Meanwhile, the European Union has taken a significant step towards easing trade tensions with the U.S., adopting draft regulations to remove tariffs on U.S. industrial goods and provide preferential treatment to certain U.S. agricultural and seafood products.

Across the Atlantic, the U.S. economy showed a robust performance in the second quarter, with the Real GDP increasing by 3.3%, revised from the previously reported 3.0% surge. The upward revision was primarily due to revisions in investment and consumer spending. This positive economic data has boosted U.S. stocks, with the S&P 500 reaching a new record closing high, adding 0.3%. The Dow edged up 0.2% and the tech-heavy Nasdaq Composite gained half a percent.

However, the tech sector was not immune to challenges. Nvidia's flagging of persistent uncertainty over Chinese sales affected European stocks, causing them to potentially open lower on Friday.

The U.S. labour market also showed signs of strength, with jobless claims falling to 229,000 last week, indicating low layoffs.

In the world of central banking, Federal Reserve Governor Christopher Waller has called for a rate cut at the upcoming meeting in September and expects more rate cuts to follow. This rate-cut expectation has contributed to gold's poised weekly gain.

Yet, the financial scene is not without its controversies. Federal Reserve Governor Lisa Cook is embroiled in a legal battle with former President Donald Trump, suing him over his attempt to fire her. This potential legal battle could have implications for the U.S. central bank's autonomy.

Elsewhere, the ongoing conflict between Russia and Ukraine continues to cast a shadow over the region. At least 23 people, including four children, were killed in Russian missile and drone attacks in Kyiv, Ukraine.

The energy market also experienced fluctuations, with oil dipping after gaining in the previous session. The dollar, on the other hand, is set for a 2% monthly fall against a basket of currencies due to Fed independence worries and heightened expectations of imminent Fed rate cuts.

A U.S. inflation reading is scheduled for later in the day, potentially providing clues on the Federal Reserve's rate outlook. The U.S. PCE inflation and spending data, Chicago-area business activity reports, and consumer sentiment reports are among the economic releases in focus today.

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