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European markets are declining as German economic data disappoints


European stocks fell Wednesday as traders turned their attention to economic data signaling the likely path for euro-zone interest rates.

Europe’s regional Stoxx 600 was down 0.2 percent at market open, reversing gains from the previous session, while France’s Cac 40 was down 0.3 percent.

Germany’s Dax fell 0.1 percent after data showed industrial production in the eurozone’s largest economy rose 0.3 percent in April, following the previous month’s contraction, but economists expected an increase of 0 .6 percent no.

The measures come a day after a survey by the European Central Bank showed that consumers were steadily lowering their inflation expectations in the eurozone. Traders are watching the data closely ahead of an ECB meeting next week in which rates are expected to be hiked from current levels of 3.25 percent to stave off continued inflation.

Annual consumer prices in the single currency bloc of 20 countries rose 6.1 percent in the year to May, down from 7 percent in April, but investors expect to remain too high to convince policymakers to stop raising the interest.

“While the ECB would welcome the fall in inflation expectations, its work is far from done,” said Mohit Kumar, chief financial economist for Europe at Jefferies.

US futures fell, with contracts tracking Wall Street’s benchmark S&P 500 and contracts tracking the tech-heavy Nasdaq 100 down 0.1 percent from the New York open.

Both indices rose during the previous session, with the S&P 500 gaining 0.2 percent and the Nasdaq Composite 0.4 percent, as investors hoped the US would stop rising interest rates, driving valuations higher. The S&P is up nearly a fifth so far this year.

Asian stocks were mixed with the Hong Kong Hang Seng index adding 0.7 percent, but Japan’s Topix fell 1.3 percent.

China’s CSI 300 lost 0.5 percent after data showed China’s exports contracted more than expected in May, further diminishing the country’s hopes for a strong economic rebound from the Covid-19 pandemic.

Exports contracted by 7.5 percent compared to the same period a year earlier, far short of forecasts by analysts polled by Reuters, who expected a contraction of 0.4 percent.

In Turkey, the lira tumbled as much as 7 percent during trading in London on Wednesday, to a new all-time low of 23.2 against the dollar.

Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

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