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Stocks - Europe Seen Just Higher Ahead of Inflation Data, Fed Minutes

Stock MarketsAug 19, 2020 02:08AM ET
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© Reuters.

By Peter Nurse 

Investing.com - European stock markets are seen opening largely higher Wednesday, helped by signs of compromise over a potential U.S. virus relief bill, although gains are likely to be limited with key European inflation data and minutes from the Federal Reserve due.

At 2:10 AM ET (0610 GMT), the DAX futures contract in Germany traded 0.1% higher, the FTSE 100 futures contract in the U.K. rose 0.2%, while CAC 40 futures in France dropped 0.2%.

The market optimism has been encouraged by hopes of an interim fiscal package to help the U.S. economy recover from the damage inflicted by the coronavirus. House Speaker Nancy Pelosi indicated on Tuesday she would drop many of her initial proposals to seal a deal.

"I think there’s a real desire by some in the Democratic caucus and some in the Republican conference, both in the House and the Senate, to do a smaller deal on the things we can agree upon," a senior Trump administration official said late on Tuesday, Reuters reported. "It could be about $500 billion."

Markets will also pay close attention to minutes from the Federal Reserve's recent meeting due later in the day, mapping the central bank's calculations of what would be necessary to justify further monetary policy easing against what has actually happened to the economy since the meeting.

Back in Europe, U.K. inflation surprised to the upside, with CPI coming in at 0.4% in July month-on-month and 1.0% year-on-year, above the -0.1% and 0.6% expected. EU data is released, later Wednesday.

In corporate news, AstraZeneca (NYSE:AZN) is likely to be supported by news of it signing a deal with Australia to supply it with its potential Covid-19 vaccine.

Similarly, Roche Holding (SIX:RO) has agreed to help manufacture and distribute an experimental drug for Covid-19 being developed by Regeneron (NASDAQ:REGN) Pharmaceuticals.

Oil prices edged lower Wednesday, consolidating after overnight gains on the back of a drop in U.S. crude inventories of 4.3 million barrels, industry data from the American Petroleum Institute showed after the markets closed on Tuesday.

Investors will now look for the official U.S. government inventory data, due at 10:30 AM ET (1430 GMT), as well as the meeting of experts from the Organization of the Petroleum Exporting Countries and allies including Russia, a grouping known as OPEC+, to review adherence to their deal on oil output cuts.

U.S. crude futures traded 0.8% lower at $42.55 a barrel, while the international benchmark Brent contract fell 1% to $45.03. 

Elsewhere, gold futures fell 0.8% to $1,997.00/oz, retreating below the $2,000 level. EUR/USD traded 0.1% higher at 1.1941, on course to touch $1.20 for the first time in over two years.

Stocks - Europe Seen Just Higher Ahead of Inflation Data, Fed Minutes
 

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Paul Dunne
Paul Dunne Aug 19, 2020 3:22AM ET
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