Investing.com – European stock markets were mostly lower on Thursday, with rising global bond yields impacting sentiment ahead of the release of long-awaited inflation data at the end of the week.
At 03:10 ET (07:10 GMT), the price in Germany was trading 0.3% lower, and in Britain it was down 0.2%, while in France it rose 0.1%.
Rising interest rates have a negative impact on sentiment
Stocks have retreated in Europe following weakness on Wall Street and overnight losses in Asia, with sentiment weighed on by rising US government bond yields as inflation concerns play a role in story that interest rates will remain high for longer than expected.
Two-year U.S. Treasury yields were trading around 5% on Thursday, while 10-year yields remained near their highest levels in weeks.
Data released on Wednesday showed Germany rose more than forecast in May, shining the spotlight even brighter on Friday’s euro zone data.
May releases are expected to increase 2.5% year-on-year, up from 2.4% in April.
Rates are widely expected to be cut next week, but uncertainty about what comes next is making investors nervous.
In the US, the focus is squarely on upcoming data later in the session, and more importantly, on Friday’s data, the Federal Reserve’s favorite inflation gauge.
Several Fed officials have warned that more substantial progress on inflation must be made before the U.S. central bank would consider cuts.
BHP abandons Anglo deal
In corporate news, BHP Group’s (NYSE:) share price fell 1.7% after the mining giant decided not to make a formal bid for Anglo-American (LON:), and walks away from the $49 billion takeover deal.
“We have been unable to reach an agreement with Anglo American on our specific positions regarding the risks and costs of South African regulation,” BHP said in a statement, adding that it did not receive “important information” from Anglo to address these risks.
Raw slips despite US inventory decline
Crude oil prices fell on Thursday as broader concerns about high borrowing costs outweighed optimism about a bigger-than-expected drop in US inventories.
At 3:10 AM ET, futures (WTI) were trading 0.3% lower at $79.03 per barrel, while the contract was down 0.3% at $83.1 per barrel.
Data from the report showed on Wednesday that US oil inventories shrank by nearly 6.5 million barrels last week, far more than expectations for a 1.9 million barrel decline.
The data generally heralds a similar reading of the official data, due later Thursday. The outsized draw suggested that U.S. fuel demand was picking up with the start of the high-travel summer season, which is widely seen as the Memorial Day weekend.
