Investing.com – European stock markets are set to open lower on Thursday as risk sentiment weighed on the release of hawkish minutes from the Federal Reserve’s June meeting as well as weak economic signals.
As of 02:00 ET (06:00 GMT), the Germany contract was trading down 0.6%, France down 0.7% and the UK contract down 0.5%.
Fed’s Hawkish Minutes Weigh
Most Asian stocks fell overnight following Wall Street losses, and Europe is set to follow suit after the Fed’s latest meeting showed nearly all its members backing more rate hikes. In the coming months.
“Virtually all participants noted that in their economic projections, they felt that additional increases to the target federal funds rate in 2023 would be appropriate,” the Fed minutes showed.
Moreover, some policymakers favored a rate hike at the June meeting, when the US central bank halted its one-year tightening cycle, amid concerns about labor market strength and rising inflation. high “unacceptably high”.
Fears that prolonged rate hikes could push the U.S. economy into recession weighed heavily on most developed equity markets given the importance of the world’s largest economy as an engine of global growth.
European economic concerns rise
Back in Europe, economic worries are already growing after data released on Wednesday showed euro zone business activity slipped into contractionary territory last month.
The latest, widely seen as a good indicator of overall economic health, fell to 49.9 in June from 52.8 in May.
There was good news on Thursday, with a 6.4% increase from May, much better than expected and also an improvement from the 0.4% drop the previous month, while the and are expected to release June construction PMI data later in the session. .
Yellen visits China
Elsewhere, investors will also likely be watching US Treasury Secretary Janet Yellen’s visit to China given the threat of an escalation in the trade dispute between the two countries after China imposed export curbs on key materials for chip manufacturing to the United States earlier this week.
Oil falls on fears over US activity
Oil prices edged lower on Thursday as worries about further interest rate hikes dampening economic activity in the United States, the world’s biggest crude consumer, overshadowed shrinking U.S. inventories.
Data released by the industry group on Wednesday showed U.S. oil inventories fell nearly 4.4 million barrels in the week to June 30, well above expectations for a 1.8 drawdown. million barrels.
Official figures from the are due later in the session, but a series of inventory cuts have bolstered hopes that demand for US oil will pick up during the busy summer travel season.
As of 2:00 a.m. ET, the contract fell 0.5% to $76.26, while futures traded down 0.3% to $71.58 a barrel.
Additionally, it fell 0.1% to $1,926.45/oz as it traded down 0.1% to 1.0846.