Investing.com – European stock markets fell on Thursday after data showed Germany, the region’s largest economy, slipped into recession in the first quarter of the year.
At 03:15 ET (07:15 GMT), the DAX index in Germany traded down 0.2%, the FTSE 100 in the UK fell 0.4% and the CAC 40 in France fell 0. .3%.
Data released earlier on Thursday showed German production in the first quarter fell 0.3% from the previous three months after falling 0.5% between October and December. This means that Europe’s main engine of growth has suffered from a winter recession.
“The reluctance of households to buy manifested itself in various areas,” the German statistics office said in a statement. “Households spent less on food and drink, clothing and footwear, and furnishings.”
The June GfK Consumer Confidence Index also showed that German sentiment remained weak over the year, with the index improving only slightly to -24.2 in June from -25.7 the previous month. .
Yet despite this negative outlook, the European Central Bank still needs to raise borrowing costs to bring inflation back to its target, Governing Council member Bostjan Vasle said in an interview with a Slovenian newspaper on Thursday.
Vasle joins several other members of the ECB’s 26-member Governing Council in calling for more hikes that could still linger beyond the summer months.
Investors are also worried about the slow pace of negotiations on raising the US debt ceiling.
Ratings agency Fitch flagged the possibility of a U.S. “AAA” rating downgrade on Wednesday night, saying that while it still expected lawmakers to reach a deal by the deadline for in early June, continued uncertainty had raised risks of a potential US default. .
In corporate news, Tate & Lyle (LON:TATE) stock rose 2% after the food giant posted a 27% increase in revenue in the year to March, benefiting from a surge in sugar prices over the past year.
United Public Services (LON:UU) The stock fell 0.5% after the water company reported a 42% drop in profits, despite trying to appease investors by increasing its dividend final 4.6%.
Oil prices fell slightly on Thursday, retreating from three-week highs amid mounting pressure from a strong dollar as uncertainty surrounding U.S. debt ceiling negotiations mounted.
The US currency soared to a two-month high overnight on expectations that US rates will stay higher for longer, making crude more expensive for international buyers, stifling demand.
As of 3:15 a.m. ET, U.S. crude futures were trading down 0.5% at $73.94 a barrel, while the Brent contract was down 0.4% at $78.08.
Both benchmarks rose nearly 2% on Wednesday after official data showed U.S. crude inventories fell more than expected last week.
Additionally, gold futures fell 0.2% to $1,959.90 an ounce, while EUR/USD traded down 0.3% to 1.0720.
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