European stock markets are set to begin in the red on Wednesday as investors mourn the failure to reach an agreement to extend the US debt ceiling.

European stock markets are set to begin in the red on Wednesday as investors mourn the failure to reach an agreement to extend the US debt ceiling ahead of the publication of critical economic data.

On Monday, US President Joe Biden and House Speaker Kevin McCarthy conducted "productive" negotiations over lifting the federal government's $31.4 trillion debt ceiling, but there had been no evidence of movement yesterday.

There is now less than a week until a probable first-ever US government default, with US Treasury Secretary Janet Yellen warning that it is now "highly likely" that the US government may be running out of cash as early as June 1st.

Over in Europe, the Ifo poll of current business conditions in Germany, which is coming later in the day, will be widely followed for signs about confidence in the region's largest economy.

According to Tuesday's PMI statistics, German business activity grew for the fourth month in a row in May, with the resurgence of the services sector more than compensating a fall in manufacturing.

Inflation in the United Kingdom slowed in April, with the annual rate falling to 8.7%, still over forecasts, from 10.1% in March, as the BoEs protracted hiking cycle took effect.

Oil prices jumped on Wednesday as industry data showed a steep decline in U.S. stocks, indicating tighter supplies as the driving season in the United States approaches.

The API said that crude stockpiles declined by around 6.8 million barrels in the week ending May 19, while petrol inventories fell by approximately 6.4 million.

If verified later in the afternoon, petrol stockpiles would have fallen for the third week in a row to their lowest pre-Memorial Day levels since 2014.

(investing.com, reuters.com)