European stocks traded lower Wednesday as investors await a testimony from U.S. Federal Reserve Chairman Jerome Powell in the hope for hints on imminent interest rate cuts from the central bank.
The pan-European Stoxx 600 had slipped 0.3% midway through the morning session. Food and beverage stocks slipped 1% while banks were the strongest performers, the sector rising 0.7% on the back of a 4% jump for Commerzbank (DE:CBKG).
Powell is scheduled to testify in front of the House Financial Services Committee on Wednesday, a week after a stronger-than-expected jobs report for June dampened expectations that the Fed would take swift and decisive action on interest rates.
Stocks in Asia were mostly higher Wednesday afternoon, MSCI’s broadest index of Asia-Pacific shares outside Japan climbing 0.4%, while Japanese stocks slipped slightly in afternoon trade.
Investors will also be monitoring trade negotiations between the U.S. and China after White House economic adviser Larry Kudlow said officials from the world’s two largest economies had held a “constructive” phone conversation on Tuesday.
Meanwhile, tensions between traditional transatlantic allies have continued to simmer after U.S. President Donald Trump went after British Prime Minister Theresa May and her Washington ambassador after the envoy was revealed to have branded the White House “inept.”
In corporate news, Deutsche Bank (DE:DBKGn) shares began Wednesday’s session with a reprieve, climbing 2% in early trade having been in continual decline since Monday. Markets had reacted skeptically to the German lender’s mass restructuring plan, which will drastically shrink its investment bank and shift focus to its domestic market.
Companies listed on the European blue chip Stoxx 600 index are expected to report 0.8% earnings growth in the second quarter, down sharply from a 1.8% estimate a week ago, according to data released on Tuesday from I/B/E/S Refinitiv.
Meanwhile Airbus deliveries have overtaken U.S. rival Boeing (NYSE:BA) for the first time in eight years, making the company number one in the world after Boeing reports a 37% drop in deliveries for the first half of 2018.
Chipmaker AMS saw its shares trading 4% higher in the early minutes of trade Wednesday, climbing to the top of the European blue chip index.
British recruitment giant Hays fell 6.2% after domestic rival PageGroup warned on profits, while British technology company Micro Focus tumbled nearly 7% after warning Tuesday that its revenues would fall by as much as 6% in 2019, as it struggles to absorb Hewlett Packard’s software division.
In the U.K., Boris Johnson and Jeremy Hunt, rivals to become next prime minister, clashed over who could best handle Brexit on Tuesday in a testy television debate just two weeks before one will be named successor to Theresa May.
Data published Wednesday revealed that the U.K. economy grew by more than expected in May, aided by a resurgence in car production after Brexit-related shutdowns. Overall output expanded by 0.3% after contracting by 0.4% in April, exceeding expectations of a modest 0.1% rise.