European markets opened slightly lower on Thursday, as investors adopted a cautious stance ahead of key inflation data from the United States and signals from the Federal Reserve on the future path of interest rates.
The pan-European Stoxx 600 slipped by 0.3% in early trading, with losses seen across most sectors. Tech and consumer discretionary stocks led the declines, following a subdued session on Wall Street and further pullback in Asian equity markets overnight. Energy and mining shares showed modest gains, supported by stable commodity prices and expectations of resilient demand.
London’s FTSE 100 opened marginally down by 0.2%, with investors digesting fresh commentary from the Bank of England as well as mixed economic indicators from the UK. Housebuilders and retailers underperformed, while the oil majors offered some support to the index amid steady Brent crude prices above $85 per barrel. Sterling remained relatively stable against the dollar, trading near $1.26.
Germany’s DAX dropped by around 0.3%, pressured by weakness in industrials and automakers. Concerns around Chinese growth weighed on sentiment, particularly for German export-heavy sectors. In France, the CAC 40 declined 0.4% as political uncertainty and upcoming elections continued to inject volatility into domestic stocks. Banking and insurance names were notably softer.
Market attention is now firmly focused on the upcoming release of the US core PCE inflation index — the Federal Reserve’s preferred inflation measure — which is expected to provide further clarity on whether recent disinflation trends are strong enough to justify a rate cut later this year. A cooler-than-expected reading could lift global equities, while any upside surprise may reinforce the Fed’s cautious tone.
Bond yields across Europe remained largely steady, with the German 10-year bund hovering near 2.45% and the UK gilt yield just below 4.1%. Traders are also monitoring speeches from several ECB policymakers later today for further insights into the eurozone’s interest rate outlook following this month’s cut.
Overall, European markets are navigating a delicate balance between inflation, policy expectations, and geopolitical tensions. With little conviction among traders, sideways movement may dominate until stronger signals emerge from the US and further clarity is offered on political developments within the bloc.
REFH – newshub finance
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