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European stock futures slip lower; German consumer prices remain elevated



© Reuters.

By Peter Nurse – European stock markets are expected to open lower Wednesday, as investors digest key German inflation data ahead of the release of the minutes from the U.S. Federal Reserve. 

At 02:00 ET (07:00 GMT), the contract in Germany traded 0.2% lower, in France dropped 0.1%, while the contract in the U.K. fell 0.4%.

The latest economic activity data in both Europe and the United States has pointed to an unexpected pick-up in business activity this month, but equity markets have reacted negatively as this suggests inflation may be more difficult to tame, cementing the case for higher interest rates.

German rose 1.0% on the month in February, after falling 0.8% the prior month, resulting in the climbing 8.7%, above January’s 8.6%.

Italian inflation figures are also expected later in the session, and the country’s is expected to remain in double figures on an annual basis. 

Across the pond, the from the Fed’s meeting earlier this month are expected later Wednesday, and will be studied carefully for signs on how high policymakers project interest rates will climb after recent data showed robust , stronger-than-expected and sticky .

Earlier in the day. the Reserve Bank of New Zealand lifted its by 50 basis points to 4.75%, its highest level since late 2008, and flagged more increases as inflation remained elevated.

In the corporate sector, Rio Tinto (LON:) will be in the spotlight after the U.K.-listed miner more than halved its dividend while reporting a hefty drop in annual profit as iron ore prices fell on slower demand, particularly from China.

Danone (EPA:) reported stronger than expected sales growth in the last quarter of 2022, as the French food company was able to raise prices in the face of soaring raw materials and energy costs.

Quarterly results from the likes of Iberdrola (BME:), Telefonica (BME:), Ferrovial (BME:) and Lloyds Banking Group (LON:) will also be in focus.

Oil prices drifted lower Wednesday on concerns higher interest rates will hit economic activity in the U.S., the largest consumer in the world, and thus fuel demand.

U.S. crude inventory data from the , a day later than usual after Monday’s holiday, are due later in the session, and are expected to show another build, exacerbating the demand worries. 

By 02:00 ET, traded 0.6% lower at $75.94 a barrel, while the contract fell 0.5% to $82.68. 

Additionally, rose 0.1% to $1,843.95/oz, while traded 0.1% higher at 1.0659.

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