European stock markets traded lower Thursday ahead of the publication of the ECB’s strategy review, handing back some of the previous session’s gains after a weak lead from Asia.
At 4:05 AM ET (0805 GMT), the DAX in Germany traded 1.4% lower, the CAC 40 in France fell 1.8% and the U.K.’s FTSE 100dropped 1.4%.
Stock markets have generally posted strong gains this year. However, sentiment could be changing amid worries of a Chinese regulatory clampdown on tech stocks, rising Covid-19 virus cases and fretting that central banks, and the Federal Reserve in particular, could be close to tightening monetary policy.
The DAX closed 1.2% higher Wednesday, the CAC 40 gained 0.3% and the FTSE 100 ended up 0.7% after the release of the Federal Reserve’s latest policy meeting minutes.
They stated that more evidence of a robust economic recovery would be needed to set a timeline for asset tapering, but they also made clear that some FOMC members think that could come sooner than previously expected.
Sticking with central banks, the European Central Bank is set to announce the outcome of a 18-month strategy review at 1100 GMT, followed by a news conference hosted by President Christine Lagarde at 1230 GMT.
The central bank is expected to raise its inflation goal to 2%, a more explicit target than the previously used phrase, “below, but close to, 2% over the medium term”, as well as describing the target as symmetric.
In corporate news, TeamViewer (DE:TMV) stock fell 13%, to a 52-week low, after the software specialist reported weaker-than-expected billings growth in the second quarter. The company, which recently announced an expensive sponsorship deal for soccer club Manchester United Ltd (NYSE:MANU), had profited from a surge in new business early in the pandemic.
Deliveroo (LON:ROO) stock rose 4.9% after the food delivery company raised its full-year guidance following strong growth in the first half of the year, while Danske Bank (CSE:DANSKE) stock rose 3% after the Copenhagen-based bank raised its full-year outlook.
Wise stock fell 1.1% with the financial technology company handing back some of the 10% gains it profited from on its first day of trading after its direct listing debut. Elsewhere, Iberdrola (MC:IBE), Europe's largest renewable energy provider, fell 4.5% as a corruption case rumbled on.
The data slate centers around the weekly U.S. unemployment figures later in the session, with initial jobless claims seen falling to 350,000 last week, from 364,000 the previous week.
Elsewhere, oil prices dropped Thursday, falling for the third consecutive session, amid continued uncertainty over future OPEC+ production levels after a dispute halted talks earlier this week.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, had been expected to boost production to balance the market given growing demand before a spat between senior members Saudi Arabia and the United Arab Emirates.
Evidence of the improving demand in the U.S. came late Wednesday with the American Petroleum Institute reporting a reduction of almost 8 million barrels from stockpiles last week, largely matching the 8.2 million-barrel draw recorded during the previous week.
U.S. crude oil supply data from the U.S. Energy Information Administration will be released later in the day.
By 4:05 AM ET, U.S. crude futures traded 1.5% lower at $71.12 a barrel, while the Brentcontract fell 1.4% to $72.44.
Additionally, gold futures rose 0.2% to $1,806.15/oz, while EUR/USD traded 0.2% higher at 1.1814.