European stock futures edge lower; Eurozone PPI in focus

By Peter Nurse 

Investing.com - European stock markets are expected to open marginally lower Thursday, as investors digest the broadly hawkish tone from the minutes of the last Federal Reserve meeting ahead of the release of key Eurozone inflation data.

At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.4%, while the FTSE 100 futures contract in the U.K. fell 0.2%.

The main European stock indices have started the new year positively, with both the DAX and CAC 40 gaining over 2% on Wednesday, as the release of better-than-expected inflation data from Germany and France raised hopes that the worst of the cost-of-living crisis in Europe is over.

The November Eurozone PPI release is due later in the session, and should provide more clues as to where inflation is headed in Europe. 

Ahead of this release, European equities are set to have a more negative tone after the minutes of the Fed’s December meeting showed that while policymakers supported a slower pace of interest rate hikes, they also want rates to be kept higher for longer. 

In the corporate sector, Next (LON:NXT) is likely to be in the spotlight as the U.K. retailer is scheduled to release a sales update, providing clues as to how the holiday period went as consumers struggled with soaring inflation.

Oil prices rose Thursday, rebounding after two sessions of steep losses as rising COVID-19 cases in China and an IMF warning on a potential recession raised fears of weak demand in 2023.

Data from the industry group American Petroleum Institute indicated that U.S. crude inventories rose by 3.3 million barrels in the last week of December. However, releases from the Strategic Petroleum Reserve have contributed to this build, suggesting underlying fuel consumption remained robust through the holiday season.

Official data from the Energy Information Administration will be studied later in the session for confirmation.

By 02:00 ET, U.S. crude futures traded 1.2% higher at $73.69 a barrel, while the Brent contract rose 1% to $78.54. 

Both contracts suffered cumulative declines of more than 9% on Tuesday and Wednesday, the biggest two-day losses at the start of a year since 1991, according to Refinitiv Eikon data.

Additionally, gold futures fell 0.1% to $1,856.75/oz, while EUR/USD traded 0.1% higher at 1.0609.