Investing.com - European stock markets are expected to open lower Thursday, with sentiment hit by fresh signs of slowing growth, both locally and in China, as well as worries about future Federal Reserve tightening.
German industrial production weakens further
German industrial production fell 0.8% on the month in July, more than the expected 0.5% drop, data showed earlier Thursday, adding to the previous month's revised 1.4% fall.
This adds to a series of data releases that show the eurozone’s largest economy, and major regional growth driver, is struggling, and threatening to slip back into recession.
The latest estimate of eurozone growth in the second quarter is due out later in the session, and the gross domestic production figure is expected to show the region grew just 0.3% on the quarter, annual growth of 0.6%.
But economic woes are not confined to Europe.
While the trade numbers beat expectations, they show China's manufacturing sector remains under significant pressure and that policymakers will need to focus on boosting domestic demand to shore up growth.
China is a major market for Europe’s largest companies, and its faltering recovery continues to weigh on their bottom lines.
U.S. inflation worries weigh
Across the Atlantic, stronger-than-expected U.S. service sector data , released on Wednesday, pushed up concerns over sticky inflation.
Investors had just grown comfortable with the idea that inflation was retreating in the U.S., allowing the Federal Reserve to pause its rate-hiking cycle and the U.S. economy to avoid a dramatic slowdown.
There are a number of Fed officials due to speak later Thursday at a fintech conference hosted by the Philly Fed, before they soon enter the blackout period ahead of their meeting later this month.
Nestle (NS: NEST ) moves into Brazilian chocolate market
Back in Europe, Swiss food giant Nestle (SIX: NESN ) announced earlier Thursday that it is buying a majority stake in Brazilian premium chocolate maker Grupo CRM, with the deal expected to close in 2024.
Grupo CRM has more than 1,000 chocolate boutiques under the Kopenhagen and Brasil Cacau brands and a strong, growing online presence, Nestle said.
Crude weakens on weak Chinese trade data
Oil prices fell Thursday, edging back from 10-month peaks as more signs of slowing Chinese growth overshadowed another draw in U.S. inventories, signaling tightening supplies.
The weak trade figures suggest the second biggest economy in the world, and largest crude importer, is at risk of missing Beijing's annual growth target of about 5%.
The reading usually acts as a precursor to inventory data from the Energy Information Administration , which is due later in the day.
By 02:00 ET, the U.S. crude futures traded 0.5% lower at $87.12 a barrel, while the Brent contract dropped 0.5% to $90.19.
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