European Stocks Slide as Fed Minutes Signal June Hike Possible

European stocks fell from a two-week high after minutes from the Federal Reserve’s last meeting showed officials want to raise interest rates next month if the economic pickup stays supportive.

The Stoxx Europe 600 Index lost 0.4 percent at 8:13 a.m. in London, with commodity producers declining the most. Fresnillo Plc and Anglo American Plc slipped more than 4 percent, following metal prices lower. Europe’s benchmark climbed with banks yesterday, after closing little changed for the previous two sessions.

Fed officials used the word “June” six times in a policy context, minutes from the April meeting showed late yesterday, following speeches by regional Fed bank presidents warning investors not to dismiss a mid-year hike. Traders are now pricing in a 32 percent probability of higher borrowing costs next month, from just 4 percent on Monday. The first month with at least even odds for a rise has been brought forward to September, from as late as February 2017 a week ago.


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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam