European Shares Seen Opening Mixed Ahead Of ECB Rate Decision

(RTTNews) - European stocks are seen opening mixed on Thursday ahead of a European Central Bank (ECB) policy meeting and the release of the U.S. August Producer Price Index (PPI) later in the day.

As the Middle East conflict shows no signs of easing, the ECB is seen raising rates for the second time this year, with a 25-basis points hike fully priced in.

Traders also await the U.S. PPI data for additional clues about the Federal Reserve's rate path.

After last Friday's robust August U.S. jobs report, markets now put the odds of a Federal Reserve rate hike on September 16 at about 60 percent, but the decision largely hinges on the PPI as well as CPI data due on Friday.

On the geopolitical front, there has been as escalating in fighting between Saudi Arabia and the Houthis in Yemen, fueling concerns about further disruptions to energy supplies.

U.S. President Donald Trump said oil prices that spiked because of the Iran war are unlikely to come down until after the U.S. midterm elections.

It is feared that rising oil prices will fan inflation and add to pressure on global central banks to raise interest rates.

Asian markets were broadly lower due to concerns over rising oil prices and bond yields.

Gold was a tad higher at $4,410 an ounce on a softer dollar while Brent crude futures were subdued around $101 a barrel, hovering at their highest level since May.

U.S. stocks ended lower for a third consecutive session overnight as surging oil prices and higher bond yields clouded the outlook for inflation and interest rates.

Crude oil futures reached their highest level since May 22 after the U.S. and Iran attacked tankers in the Gulf region and Yemen's Houthis hit oil facilities in Saudi Arabia.

President Donald Trump said the doesn't think the Iran war will end until after November's midterm elections, adding that the U.S. is not looking to restart negotiations and that Tehran "can't hold out any longer."

Trump also said that recent U.S. strikes in Strait of Hormuz have incapacitated nine Iranian tankers and more attacks could follow.

Meanwhile, the yield on the benchmark 10-year Treasury note surged to 4.857 percent, the highest since November 2023, after the Treasury Department said it would triple the size of its individual long-dated Treasury buyback operations to $6 billion, which investors deemed insufficient.

The Dow dipped 0.8 percent to reach its lowest closing level in over a month while the S&P 500 gave up half a percent and the tech-heavy Nasdaq Composite shed 0.6 percent.

European stocks hit over one-month lows on Wednesday, with rising Middle East tensions and hawkish rate bets keeping investors' risk appetite in check.

The pan-European STOXX 600 fell 1.4 percent. The German DAX tumbled 1.7 percent, France's CAC 40 slumped 1.9 percent and the U.K.'s FTSE 100 lost 1.3 percent.