Investing.com – European stock markets edged higher Thursday, boosted by overnight gains on Wall Street as investors focus on political developments in the region.

At 03:10 ET (07:10 GMT), the in Germany traded 0.3% higher, the in France rose 0.6% and the in the U.K. climbed 0.5%.

Rate cuts on the agenda?

European strength follows on from overnight gains on Wall Street, with the and the posting record highs in holiday-shortened trade, after weak labor and economic activity readings increased the likelihood that the Federal Reserve will cut interest rates by September. 

The cut interest rates last month and signalled more easing in the coming months, but made no commitment about the timing of the next move.

The ECB should not rush into its next interest rate cut, Slovenia’s central bank governor Bostjan Vasle said on Wednesday, as a host of risks could still derail eurozone disinflation.

However, International Monetary Fund European Department Director Alfred Kammer took a different stance, saying disinflation in the region remains on track, providing room for the central bank to cut interest rates further.

There’s little in the way of significant economic data on the calendar Thursday, and trading is also likely to be impacting by the U.S. Independence Day holiday. 

UK goes to the polls 

Investors will also be looking for more political clarity, with the U.K. going to the polls in a general election.

The opposition Labour Party is widely expected to record a significant win, ending 14 years of the Conservative Party in power.

However, the markets appear to be fairly sanguine over this likely change, with the Labour Party keen to appear fiscally responsible and the Conservative Party’s reputation for economic management badly tarnished amid years of political turbulence.  

Sunday also sees the crucial legislative run-off vote in France. 

The far-right National Rally won the popular vote last weekend, and the two most likely scenarios now appear to be a government led by the far-right National Rally or a hung parliament.

Lufthansa to up ITA stake?

Lufthansa (ETR:) stock rose 0.3% after the CEO of the German airline said, in an interview published on Thursday, that the carrier will consider raising its stake in Italy’s ITA Airways to 90%, starting from early next year.

Carsten Spohr was speaking after his company won EU antitrust approval to buy 41% of state-owned ITA.

Crude falls on economic concerns

Crude prices fell Thursday, retreating from two-month highs as soft U.S. economic data raised some concerns over long-term demand.

By 03:10 ET, the futures (WTI) traded 0.8% lower at $83.21 per barrel, while the contract dropped 0.7% to $86.70 per barrel.

This selloff followed some weak labor market and purchasing managers index indicators in the U.S., which signaled some cooling in the largest economy in the world.

PMI data from top importer China also underwhelmed on Wednesday, also raising concerns about the strength of the economic recovery in the world’s largest crude importer. 

That said, losses are small with the market supported by official data from the , released Wednesday, showing that U.S. crude and fuel stockpiles all fell by more than expected last week.

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