European Markets Unmoved as Investors Analyze Fed Data

European markets were flat on Thursday as investors focused on economic data from the region and the latest signals from the U.S. Federal Reserve on inflation and interest rates.

The Stoxx 600 was flat at midday London time. Mining stocks led the way, up 2.5%, while insurance and chemicals stocks both dipped 1%.

On Wednesday, minutes from the Fed’s last meeting in December were released, showing the central bank remained committed to higher interest rates for “some time.” The minutes prompted U.S. markets to give up earlier gains in the trading session. This caused the stock market to fall and investors to become worried about the future of the economy.

U.S. stock futures were slightly lower early Thursday morning as investors looked ahead to labor data coming later this week. The minutes from the Federal Reserve's latest meeting showed a hawkish tone, but investors appeared to be focused on other data.

European markets closed higher on Wednesday as inflation data from France and Germany indicated that consumer price increases across the euro zone are slowing. This is good news for consumers, as it means that their purchasing power is not being eroded by inflation.

Asian markets rose on Thursday as investors brushed off the U.S. Federal Reserve's pledge to raise interest rates in order to fight inflation.

In December, inflation in Italy was 12.3% year-on-year, down from 12.6% the previous month. The figures are harmonized across the euro zone.

France, Germany, and Spain have all reported slowdowns in their annual rate of inflation over the last week. This is largely due to a drop in energy bills, thanks to government support plans and caps.

Inflation for regulated energy products in Italy increased from 57.9% to 70.3%.A preliminary estimate for inflation in the euro zone is expected Friday morning.

Analysts have warned that it may be too soon to say that inflation has peaked, as markets such as energy and food remain volatile.

German exports fell in November, despite growth forecasts. This was likely due to high inflation and market uncertainty.

According to the federal statistics office, exports fell 0.3% compared with the previous month. This is lower than the 0.2% growth that was predicted by Reuters polling.

Imports fell by 3.3% in November, more than the 0.5% drop that analysts had expected.

Germany's inflation rate for December came in lower than expected at 9.6% year on year. This is a decrease from the previous month's rate of 10.1%.

Next, a U.K. fashion retailer, topped the pan-European Stoxx 600 on Thursday after forecasting promising pre-tax profits.

The clothing and home products store's stock rose 6.4% to reach its highest level since mid-August.

Oil prices rose more than 1% after two days of declines, as China’s reopening added optimism for an economic rebound and support in demand.

Brent crude futures rose 1.08% to $78.68 a barrel on Wednesday, while U.S. West Texas Intermediate futures gained 1.19% to $73.71 a barrel.

The rise in crude prices came as data showed that U.S. crude inventories fell by 5.3 million barrels last week, more than double the expected drop.

Investors appear to have brushed off concerns of a potential global recession, despite shaky economic growth prospects in the US and China. This has led to a more than 9% slump in oil prices over the past two days.

Citi is not optimistic about lithium prices in the short term. Lithium is a key ingredient in electric vehicle batteries, and demand for EVs is expected to increase in the coming years. However, Citi believes that lithium prices will remain under pressure in the near term due to oversupply.

The bank is still optimistic about its long-term prospects, and has identified three stocks to keep an eye on.

Bank of America has issued a report recommending that investors buy shares in a global fertilizer maker, citing a worldwide shortage of the product. The bank sees 50% upside potential in the stock.

According to the Wall Street bank, the company has a 55% profit margin, which protects it from rising natural gas prices.

European markets are set to open lower on Thursday as investors weigh the latest inflation data from Europe and the latest minutes from the U.S. Federal Reserve.

According to data from IG, the U.K.'s FTSE 100 index is expected to open 13 points lower at 7,570, Germany's DAX 43 points lower at 14,446, France's CAC down 25 points at 6,755, and Italy's FTSE MIB down 99 points at 24,801.

On Thursday, data releases include euro zone producer prices for November and preliminary Italian inflation data for December. Germany's export data for November is also set to be released. Greggs will release earnings.