European Shares Seen Lower After Fed Minutes Release

(RTTNews) - European stocks may open broadly lower on Thursday, though energy stocks may benefit from rising oil prices on Middle East supply fears.

Oil extended gains after climbing more than 3 percent overnight on news of deadly explosions in Iran during Soleimani anniversary procession as well as the shutdown of a major oilfield in Libya.

A series of brazen attacks in the Red Sea and North Arabian Sea by Yemen's Houthi rebels against merchant shipping and U.S. Navy warships also posed a serious threat to global supply chains.

The dollar took support from an uptick in U.S. Treasury yields as investors reconsidered their projections for the extent of Federal Reserve rate cuts this year.

Following hawkish Fed minutes release, investors now await U.S. reports on private sector employment and weekly jobless claims later in the day and Friday's closely watched monthly jobs report for additional clues on central banks' policies.

Interest rate cuts could be coming in 2024 but the timing and pace of the reductions in borrowing costs remain uncertain.

The Fed's next monetary policy meeting is scheduled for January 25-26, with no changes expected in rates.

CME Group's FedWatch Tool indicates there is a 64.8 percent chance the Fed could lower rates by a quarter point at its following meeting in March.

Asian markets extended declines as Fitch downgraded the issuer default ratings of four Chinese national asset management companies and warned of more downgrades, citing weaker government support and headwinds from a property market slump.

A measure of Chinese services sector activity rose to a five-month high in December, helping limit regional losses to some extent.

U.S. stocks fell overnight to extend declines from the previous session as the latest Fed meeting minutes shed little light on when rate cuts might begin.

Projections provided by Fed officials at the December 12-13 meeting indicated they expect three quarter point rate cuts by the end of 2024.

Given an unusually elevated degree of uncertainty, participants also noted that rates could stay at current levels for longer than anticipated and that further increases are still possible.

On the data front, U.S. manufacturing sector contracted at a slower pace in December while job openings nudged down to the lowest in more than two years in November.

The tech-heavy Nasdaq Composite declined 1.2 percent to close lower for the fourth consecutive session, while the Dow and the S&P 500 both dipped around 0.8 percent. European stocks fell on Wednesday amid uncertainty about the timing of potential interest-rate cuts. The pan-European STOXX 600 closed 0.9 percent lower, marking its worst session since Nov. 10.

The German DAX lost 1.4 percent, France's CAC 40 shed 1.6 percent and the U.K.'s FTSE 100 dropped half a percent.