EUROPE MARKETS: European Stocks Slip After Fed Minutes Cause Bemusement

By Sara Sjolin, MarketWatch Features Dow Jones Newswires

Primark parent ABF jumps after upbeat outlook

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European stocks moved lower on Thursday, as investors digested the latest Federal Reserve minutes, which failed to provide further clarity on the outlook for U.S. interest rates.

The Stoxx Europe 600 index fell 0.1% to 382.44, after notching a second straight day of gains on Wednesday.

Among top performers on Thursday, Associated British Foods PLC (ABF.LN) shares jumped 3.8% after the ingredient supplier and parent of fashion retailer Primark said its full-year outlook has improved (http://www.marketwatch.com/story/abf-outlook-edges-up-due-to-strong-primark-trading-2017-07-06).

On a downbeat note, Reckitt Benckiser Group PLC (RB.LN) shares dropped 1.9% after the consumer products company said it expects to permanently lose some revenue (http://www.marketwatch.com/story/reckitt-benckiser-to-lose-revenue-post-cyberattack-2017-07-06) after last month's cyberattack (http://www.marketwatch.com/story/cyberattacks-hit-global-companies-in-europe-2017-06-27-111035037).

Fed minutes: More broadly, investors in Europe assessed the minutes from the June meeting of the U.S. Federal Open Market Committee (http://www.marketwatch.com/story/fed-minutes-several-see-balance-sheet-reduction-starting-in-a-couple-of-months-2017-07-05), released after European markets closed on Wednesday. The minutes showed Fed policy makers are increasingly split on inflation and how that might affect future decisions by the central bank.

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"[The] minutes gave rise to confusion rather than providing a clearer insight on the FOMC's next policy move," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in a note.

"[The] minutes revealed increasing tensions at the heart of the committee regarding the shortfall in inflation, and a lack of understanding regarding the financial conditions that have not tightened following the Fed rate hikes since December," she said.

Read:Investors face a long, hard road back to 'normal' (http://www.marketwatch.com/story/investors-face-a-long-hard-road-back-to-normal-2017-06-29)

And see:What caused last week's 'taper tantrum' in markets? (http://www.marketwatch.com/story/what-caused-last-weeks-taper-tantrum-in-markets-2017-07-03)

In the same vein, the European Central Bank will release minutes from its June 8 meeting at 12:30 p.m. London time, or 7:30 a.m. Eastern Time on Thursday.

Traders are looking for any hints the ECB is getting closer to ending its ultraloose monetary policy stance, after central bank President Mario Draghi was seen as striking a hawkish tone (http://www.marketwatch.com/story/what-happened-to-mario-draghis-silver-tongue-2017-06-28) at a speech in Portugal last week.

"The ECB hawks could get disillusioned provided that the ECB's meeting accounts will certainly maintain an emphasis on low inflation and provide little-to-no insight regarding the Quantitative Easing (QE) exit plans," Ozkardeskaya said.

The dollar initially rose after the Fed minutes, but has since pared its gains. The ICE Dollar Index was down slightly on Thursday, trading at 96.184. The euro bought $1.1355, compared with $1.1351 late Wednesday in New York.

Individual indexes: Germany's DAX 30 index was flat at 12,454.26, while France's CAC 40 index was down 0.3% at 5,163.87.

The U.K.'s FTSE 100 index slipped 0.1% to 7,359.24.

Stock movers: Shares of Sodexo SA (SW.FR) slid 5.2% after the facilities management company issued a sales warning after a weaker-than-expected third fiscal quarter.

Economic docket:German manufacturing orders rose (http://www.marketwatch.com/story/german-manufacturing-orders-rebound-but-disappoint-2017-07-06) 0.1% in May, missing forecasts of a 1.9% advance.

(END) Dow Jones Newswires

July 06, 2017 04:18 ET (08:18 GMT)