Analysts expect the stock markets in Europe to open lower on Thursday due to the release of the Federal Reserve minutes, which were perceived as “hawkish,” meaning that they indicated a tendency towards higher interest rates.
In addition, European Central Bank (ECB) will release key inflation data for the Eurozone, which could also impact the markets. The DAX, CAC 40, and FTSE 100 futures contracts opened lower at 0.3%, 0.4%, and 0.2%, respectively.
It’s worth noting that futures contracts are agreements to buy or sell a particular asset (in this case, the underlying stock index) at a predetermined price at a future date. Hence, future movements can indicate what analysts expect to happen when the market opens.
The stock market in Europe has started the new year off well, with both the DAX in Germany and the CAC 40 in France gaining a lot of value on a Wednesday. According to Investing.com, the inflation data shows that inflation is easing and better than investors’ and analysts’ expectations.
This news is good because it might mean Europe’s worst cost-of-living crisis is over. Later, ECB will release more data about the Eurozone’s inflation rate, which might give us more clues about what will happen with the inflation rate in the future.
On the other part of the globe, the Federal Reserve has said that they want the interest rate to stay higher for longer even though they want to slow down the rate hikes. This move will negatively impact European equities, causing a negative tone among the equities.
Oil prices are up on Thursday after experiencing two sessions of significant losses. This increase is because of concerns about rising COVID-19 cases in China and warnings from the International Monetary Fund (IMF) about the potential for a recession.
In addition, the American Petroleum Institute’s data shows that crude oil reserves in the U.S. rose by 3.3 million barrels in the last week of December.
This increase was partially due to releases from the Strategic Petroleum Reserve, which suggests that underlying fuel consumption remained strong during the holiday season. At the same time, gold futures fell slightly while the exchange rate between the U.S. dollar and the euro rose slightly.
Next, a retailer in the United Kingdom will release a sales update, providing information about the company’s performance during the holiday period. This information is likely to be of particular interest to investors and analysts because the holiday period can be an important time for retailers and because consumers in the U.K. have been struggling with high inflation.
The sales update from Next will give clues about how the company performed during this challenging economic environment and may provide insight into the overall health of the retail industry in the U.K.