By Peter Nurse
Investing.com - European stock markets are seen opening higher Tuesday, helped by the news that the European Union leaders have agreed on a massive stimulus plan to help rebuild the economies damaged by the coronavirus pandemic.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 1% higher, the FTSE 100 futures contract in the U.K. rose 0.7%, while CAC 40 futures in France climbed 0.8%.
After almost five days of haggling, the leaders agreed on a compromise that cut the share of grants within the 750 billion-euro envelope to 390 billion euros, down from 500 billion euros originally proposed, and the rest in repayable loans.
That comes on top of the seven-year one trillion euro EU budget that had been a source of contention even before the pandemic.
"This is an important signal beyond Europe's borders that the EU, even with all the (EU member states') varying backgrounds, is able to take action," German Chancellor Angela Merkel told reporters during a joint news conference with French President Emmanuel Macron.
U.S. policymakers are also set to discuss their next steps in responding to the coronavirus crisis later Tuesday, with investors expecting another economic package in the near future given some earlier measures are set to expire at the end of the July.
Adding to the positive tone, promising early data from trials of three potential Covid-19 vaccines was released Monday, adding to hopes that such a vaccine might be ready by the end of the year.
This comes with the number of coronavirus infections having climbed above 14.7 million, with over 609,000 deaths world wide, according to the latest data from Johns Hopkins University.
In corporate news, UBS (SIX:UBSG) will be in the spotlight after the Swiss banking giant announced a net profit of $1.23 billion for the second quarter, down 11% from the same period last year, but ahead of analysts’ expectations.
Oil prices edged higher Tuesday, but remained in a tight trading range around the $40 a barrel level as investors weighed up the conflicting factors of a recovery in oil demand and the growing number of coronavirus cases.
The weekly reports on U.S. crude stockpiles are studied carefully for any clues as to demand, and the American Petroleum Institute will offer up its numbers later Tuesday.
At 2:05 AM ET, U.S. crude futures traded 0.1% higher at $40.95 a barrel, while the international benchmark Brent contract rose 0.2% to $43.38.
Elsewhere, gold futures rose 0.1% to $1,819.95/oz, while EUR/USD traded at 1.1447, up 0.1%.