By Peter Nurse
Investing.com - European stock markets are seen opening lower Wednesday, on mounting Covid concerns ahead of the outcome of the Federal Reserve’s two-day policy meeting.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France dropped 0.3% and the FTSE 100 futures contract in the U.K. fell 0.8%.
France has entered a third wave of the Covid-19 pandemic, French Prime Minister Jean Castex told his country’s parliament Tuesday, with the seven-day average of new cases rising to levels last seen in late November.
French health authorities reported 29,975 new cases on Tuesday, a 4.5% jump versus last Tuesday's total and the sharpest week-on-week rise in a month and a half.
This followed the Robert Koch Institute warning earlier Tuesday that coronavirus infections are spreading exponentially in Germany, up 20% in the last week.
France and Italy said on Tuesday they will resume distribution of the AstraZeneca (NASDAQ:AZN) vaccine if the European Medicines Agency says again that the vaccine is safe for use. The EMA has already approved the drug once and repeated at a press conference on Tuesday that the benefits of the vaccine outweigh any risks. Germany and others have yet to reverse their suspensions.
Market losses are likely to be small as traders await the outcome of the Fed’s two-day policy meeting later in the day, and the subsequent press conference from Chairman Jerome Powell.
The U.S. central bank is scheduled to release new economic and interest rate forecasts, and is likely to acknowledge stronger growth in 2021. With the Biden administration’s $1.9 trillion stimulus package yet to have its impact, the market is beginning to anticipate interest rates rising sooner than in 2024, as the central bank’s current guidance suggests.
Other central bank meetings are also scheduled this week, with the Bank of England on Thursday and the Bank of Japan’s two-day get together concluding Friday.
In corporate news, German insurer Munich Re is scheduled to release quarterly earnings while car giant BMW (DE:BMWG) releases its annual report.
Oil prices pushed higher Wednesday, boosted by a surprise fall in U.S. crude inventories of 1 million barrels last week, as detailed by the American Petroleum Institute.
U.S. stockpiles had been rising as February’s unexpected cold snap in the southern states had knocked out a significant portion of the country's refining capacity.
Official data from the Energy Information Administration are due later in the session, and will be studied carefully for confirmation of this crude drawdown.
U.S. crude futures traded 0.6% higher at $65.21 a barrel, while the Brent contract rose 0.5% to $68.72.
Elsewhere, gold futures rose 0.2% to $1,735.05/oz, while EUR/USD traded 0.1% higher at 1.1904.