By Peter Nurse
Investing.com - European stock markets are seen trading higher Wednesday, helped by a positive session on Wall Street overnight. Investors will focus on key European sentiment data amid concerns the region’s recovery will be hampered by a second wave of coronavirus cases.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.4% higher, CAC 40 futures in France climbed 1% and the FTSE 100 futures contract in the U.K. rose 1%.
Wall Street's Tuesday rebound was led by a 1.7% gain in the Nasdaq Composite, while the Dow Jones Industrial Average and S&P 500 made more muted gains of 0.5% and 1% respectively.
Sentiment was helped by comments from Federal Reserve Chairman Jerome Powell, in his testimony to Congress, that the central bank remains committed to using its tools “for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy."
Back in Europe, European Central Bank board member Yves Mersch said Wednesday that the growth and inflation outlook in the euro zone has not deteriorated since the central bank decided earlier this month to keep policy unchanged. He also said the ECB's deviation from its usual rules on monetary policy should end when the medical emergency passes.
Investors will pay attention to business sentiment in the eurozone, in the form of PMI data, given the second wave of Covid-19 cases in a number of countries as well as the fraught Brexit negotiations.
Data released Tuesday showed that eurozone consumer confidence ticked up further in September.
“The increase from -14.7 to -13.9 shows that second wave worries have not dented confidence so far, but at these low levels it is also difficult to see the recovery in household consumption maintain the pace of the first months of recovery,” wrote ING’s Bert Colijn, in a research note.
Oil prices fell Wednesday after a surprise rise in U.S. oil inventories added to persistent worries about fuel demand as a surge in coronavirus cases around the globe led to stricter containment measures.
The industry body, the American Petroleum Institute, reported late Tuesday that crude oil inventories rose by 691,000 barrels in the week to Sept. 18, compared with forecasts for a drop of 2.3 million barrels. Official data is due out later Wednesday.
U.S. crude futures traded 1.1% lower at $39.37 a barrel, while the international benchmark Brent contract fell 0.9% to $41.34.
Elsewhere, gold futures rose 1,3% to $1,883.30/oz, while EUR/USD traded 0.2% lower at 1.1681.