European Shares Seen Slightly Higher In Cautious Trade

European stocks may open higher on Thursday despite U.S. debt ceiling talks showing no progress.

Speaker Kevin McCarthy is insisting it’s not his fault if the U.S. defaults on its debt. With just over a week left – including a holiday weekend – U.S. Treasury Secretary Janet Yellen reiterated her dire warning that the U.S. could have a hard time paying its bills.

Fitch Ratings placed the United States “AAA” credit on “rating watch negative,” signaling downside risks to U.S. creditworthiness.

Asian markets hit two-month lows, while the dollar pushed to a two-month high against the euro and a six-month peak versus the yen.

Gold held steady while oil prices fell slightly after gaining around 2 percent on Wednesday on data showing a large, unexpected drawdown in U.S. crude inventories.

In economic releases, revised quarterly national accounts from Germany and business confidence data from France are due later in the session.

Across the Atlantic, reports on weekly jobless claims, pending home sales and first quarter GDP may sway sentiment.

U.S. stocks fell overnight as debt ceiling negotiations dragged on and minutes from the Federal Reserve’s May meeting showed officials were split over the need for rate rises.

Nvidia Corp. gave a bullish revenue forecast for the current quarter, helping limit overall losses to some extent.

The Dow shed 0.8 percent to extend losses for the fourth day running, the S&P 500 gave up 0.7 percent and the tech-heavy Nasdaq Composite declined 0.6 percent.

European stocks closed lower on Wednesday, with selling seen across the board. The pan-European STOXX 600 fell 1.8 percent.

The German DAX plunged 1.9 percent, France’s CAC 40 plummeted 1.7 percent and the U.K.’s FTSE 100 slumped 1.8 percent.

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