Thursday’s trading activity on European stock markets was uneven as investors digested the minutes from the latest Federal Reserve meeting prior to the release of Eurozone inflation data for July.
By 03:55 ET (07:55 GMT), the DAX in Germany was up 0.4%, the CAC 40 in France was up 0.1%, and the FTSE 100 in the United Kingdom was down 0.2%.
European shares have seen solid increases over the past month, aided by a typically healthy quarterly earnings season, but there is still a degree of skepticism regarding inflationary prospects and future growth.
The Eurozone’s economic growth for the second quarter was cut down from 0.7% to 0.6% quarter on quarter on Wednesday, and investors are awaiting the newest estimates of inflation in the region, which are coming at 05:00 ET (09:00 GMT) but are not expected to depart from preliminary forecasts. In July, these were up 8.9% annually, with a monthly increase of 0.1%.
Isabel Schnabel, a member of the ECB’s board of directors, stated in an interview with Reuters on Thursday that the Eurozone inflation outlook has not improved since the ECB’s rate hike in July, indicating that she would vote for another significant rate hike next month.
The Federal Reserve is further along its road of monetary tightening, and the minutes of its July meeting, issued on Wednesday, revealed that officials saw “limited evidence” that U.S. inflationary pressures were lessening late last month.
However, they did indicate an eventual slowing in the rate of hikes, but not a switch to cuts in 2023, as was commonly believed previous to the publishing of the minutes.
There is still a significant lot of uncertainty regarding the extent of the Fed’s September rate hike, and this might keep stock markets in tight trading ranges ahead of next week’s Jackson Hole meeting of central bankers.
In company-related news, AO World (LON:AO) stock climbed 13% after the British online electronics retailer said it had stabilized its business outlook following a turbulent year marked by a failed attempt to penetrate the German market.
The Adyen (AS:ADYEN) share price declined 11% after the Dutch payments company announced declining profits in the second quarter due to a significant increase in operating expenses.
Made.com (LON:MADE) stock dropped 8.9% as the struggling online furniture retailer said it is considering a round of share sales to improve its financial sheet.
Oil prices remained unchanged on Thursday as traders weighed dropping U.S. inventories against concerns of a worldwide downturn.
The Energy Information Administration said on Wednesday that U.S. crude stocks declined by 7.1 million barrels in the week ending August 12, far more than anticipated, while exports reached a record high and gasoline demand reached its highest level of the year.
Despite this, the market is on track for a weekly loss as concerns about an economic slump persist. The potential for the 2015 nuclear deal to be revived, and therefore for Iran to produce more oil, has contributed to the gloomy sentiment.
By 3:55 EST, U.S. oil futures were trading 0.1% lower at $88.06 per barrel, while Brent futures increased 0.1% to $93.72 per barrel.
In addition, gold futures traded unchanged at $1,776.65 per ounce, and EUR/USD traded 0.2% lower at 1.0163.