Investing.com – European stock markets headed higher on Thursday, boosted by overnight gains on Wall Street, as investors focused on political developments in the region.
At 03:10 ET (07:10 GMT), shares in Germany were trading 0.3% higher, shares in France were up 0.6% and shares in Britain were up 0.5%.
Interest rate cuts on the agenda?
European strength comes from overnight gains on Wall Street, which saw record highs in holiday-shortened trading after weak data on the labor market and economic activity increased the likelihood that the Federal Reserve will cut interest rates by September. to lower.
However, last month’s interest rate cut and a signal of further easing in the coming months did not provide any assurances about the timing of the next step.
The ECB should not rush into the next rate cut, Slovenian central bank governor Bostjan Vasle said on Wednesday, as a host of risks could still derail disinflation in the euro zone.
However, Alfred Kammer, director of the International Monetary Fund’s European division, took a different view, saying disinflation in the region remains on track, creating room for the central bank to cut interest rates further.
There are few significant economic data on Thursday’s calendar, and trading is also likely to be affected by US Independence Day.
Britain goes to the polls
Investors will also be looking for greater political clarity as Britain heads to the polls in a general election.
The opposition Labor Party is widely expected to score a significant victory, ending the Conservative Party’s fourteen years in power.
However, markets appear quite optimistic about this likely change, with the Labor Party keen to appear fiscally responsible and the Conservative Party’s reputation for economic management seriously damaged by years of political turbulence.
The crucial second round in France will also take place on Sunday.
The far-right National Rally won the popular vote last weekend, and the two most likely scenarios now appear to be a government led by the far-right National Rally or a hung parliament.
Lufthansa to increase ITA stake?
Shares of Lufthansa (ETR:) rose 0.3% after the German airline’s CEO said in an interview published on Thursday that the airline will consider increasing its stake in Italy’s ITA Airways to 90% from early next year.
Carsten Spohr was speaking after his company received approval from European competition authorities to buy 41% of state-owned ITA.
Crude oil falls under economic concerns
Crude oil prices fell on Thursday, retreating from a two-month high, after soft US economic data sparked some concerns about longer-term demand.
At 3:10 AM ET, futures (WTI) were trading 0.8% lower at $83.21 per barrel, while the contract was down 0.7% at $86.70 per barrel.
This sell-off followed some weak US labor market and purchasing managers index indicators, which pointed to some cooling in the world’s largest economy.
PMI data from top importer China was also disappointing on Wednesday, also raising concerns about the strength of the economic recovery in the world’s largest crude oil importer.
That said, the losses are small as the market is supported by official data released on Wednesday, which shows US crude oil and fuel inventories all fell more than expected last week.
