European stocks edge lower; BHP seeks more time over Anglo bid
European stock markets fell Wednesday, with rising bond yields unnerving investors ahead of the release of key inflation data amid fears of monetary policy remaining tighter for longer.
At 03:05 ET (07:05 GMT), the DAX index in Germany traded 0.3% lower, the CAC 40 in France fell 0.3%, while the FTSE 100 in the U.K. dropped 0.1%.
German state inflation data due
With the quarterly earnings season largely completed, attention has returned to the plans of world central banks to shift monetary policy depending on progress made in taming inflation.
Bond yields have risen in the U.S., Asia as well as Europe amid concerns stubborn inflation will keep interest rates high for longer or even spur additional near-term hikes, particularly by the U.S. Federal Reserve.
Minneapolis Federal Reserve President Neel Kashkari said Tuesday it would take “many more months of positive inflation data” to give him confidence it is time to cut rates.
The European Central Bank is widely expected to cut interest rates next month, but uncertainty over what follows remains.
The latest eurozone inflation release is due on Friday, and is expected to tick up 2.5% in May year-on-year, from 2.4% in April.
Ahead of this, the German individual states are scheduled to release their May consumer price data later in the session, showing how the eurozone’s largest economy is coping with inflation.
BHP seeks more time over Anglo bid
In corporate news, BHP Group (NYSE:BHP) said on Wednesday that it needs more time to engage with takeover target Anglo American (JO:AGLJ), a week after the London-listed miner rejected its takeover offer.
BHP, the world’s largest listed mining group, also proposed a range of measures to alleviate Anglo’s concerns regarding the deal structure, which comprises Anglo unbundling its platinum and iron ore assets in South Africa.
The rival miners had until 16:00 GMT Wednesday to reach an agreement following a week-long extension of last week’s deadline.
Crude gains ahead of US inventory data
Crude prices rose Wednesday, adding to recent gains on hopes that demand will pick up with the onset of the travel-heavy U.S. summer season ahead of a meeting by major producers to decide future output levels.
By 03:05 ET, the U.S. crude futures (WTI) traded 0.5% higher at $80.23 per barrel, while the Brent contract climbed 0.4% to $84.27 per barrel.
Both benchmarks gained over 1% on Tuesday.
The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, is set to take place online over the weekend, and the cartel is expected to extend its current voluntary output cuts of 2.2 million barrels per day into the second half of the year.
The Memorial Day holiday on Monday signals the start of the peak demand season in the U.S., the world’s biggest oil consumer, helping sentiment in the market.
Upcoming inventory data is expected to further the notion of growing demand, with analysts predicting a 2 million barrel draw in overall inventories.
Additionally, gold futures fell 0.1% to $2,355.75/oz, while EUR/USD traded largely unchanged at 1.0855.