By Peter Nurse
Investing.com - European stock markets traded cautiously early Wednesday, with investors wary of the Covid-19 virus causing further economic damage, while a key speech from the head of the U.S. Federal Reserve loomed in the background.
At 3:40 AM ET (0740 GMT), the DAX in Germany traded 0.2% higher, the CAC 40 in France rose 0.1% and the U.K.'s FTSE index was down 0.2%.
Investors have been buoyed in recent days by signs of the Covid-19 virus receding in the U.S. and the Trump administration forcing the pace of authorizing treatments for it, as well as by progress in trade relations between the U.S. and China.
However, in Europe there have been signs of the virus re-emerging, with the French city of Marseille, for example, tightening restrictions on Tuesday to fight the outbreak.
"There are fears of a second wave in November," Professor Jean-Francois Delfraissy, who heads the scientific council that advises the French government on the pandemic, told France 2 television on Wednesday.
German Finance Minister Olaf Scholz announced Wednesday additional measures to cushion the impact of the coronavirus to the tune of 10 billion euros, while the French government will unveil its economic recovery plan in early September.
Economic data has shown a mixed picture as far as the global recovery is concerned.
In Europe, the German Ifo survey showed stronger-than-expected business sentiment and French consumer confidence held steady in August, but consumer confidence dropped to a more than six-year low in the United States this month, data showed on Tuesday, overshadowing a boom in new home sales.
With a light data calendar Wednesday, investors are looking to Thursday’s Jackson Hole symposium, where U.S. Federal Reserve Chairman Jerome Powell is due to give a speech, for further guidance on the central bank’s monetary policy framework review.
In corporate news, Provident Financial (LON:PFG) stock dropped 0.6% after the U.K.-based consumer-finance company swung to a first-half pretax loss, as the coronavirus pandemic hit the business.
Oil prices were mixed Wednesday, after settling at five-month highs on Tuesday, as U.S. producers prepared for the onslaught of Hurricane Laura by shutting most of their offshore output.
Laura is expected to make landfall late Wednesday or early Thursday along the Texas-Louisiana coast, a region that includes nearly half of U.S. refining capacity, as a Category 3 hurricane, according to the National Hurricane Center.
Further price support came from data from the American Petroleum Institute showing U.S. oil stockpiles fell more than expected last week. The Energy Information Administration will release its own official inventory data later on Wednesday.
U.S. crude futures traded 0.2% higher at $43.27 a barrel, while the international benchmark Brent contract rose 0.3% to $46.42.
Elsewhere, gold futures rose 0.1% to $1,924.80/oz, while EUR/USD traded 0.1% lower at 1.1820.