By Peter Nurse
Investing.com – European stock markets are set to open higher Wednesday, rebounding after Tuesday’s sharp losses, but trading ranges are likely to be tight ahead of the conclusion of the latest policy meeting of the Federal Reserve.
At 2:00 AM ET (0600 GMT), the contract in Germany traded 0.9% higher. France’s were up 0.7%, while the contract in the U.K. rose 0.3%.
Although the major European indices saw losses of between 1.5% and 2% on Tuesday, the tone of late has been positive. The has gained over 16% over the last month, the over 13% and the around 6%.
In the U.S. the tech-heavy index has posted an all-time high and the broader-based briefly traded in positive territory for the year as a whole.
This has been based on optimism over a global recovery from the coronavirus crisis, as well as coordinated monetary and fiscal stimulus from central banks and governments.
With this in mind, investors will be keeping a keen eye on the Federal Reserve as the U.S. central bank concludes its later in the day.
While no major policy announcements are expected, investors will scrutinize its remarks on the health of the economy, the world’s largest, particularly after the recent upturn in jobs numbers.
In corporate news, the region’s banks could be in focus Wednesday following a report that the European Central Bank is looking at a scheme to cope with potentially hundreds of billions of euros of unpaid loans in the wake of the coronavirus outbreak, Reuters reported.
The project is aimed at shielding commercial banks from staggering amounts of debt that is considered unlikely to be repaid, particularly if rising unemployment chokes off the income needed to do so.
Oil prices sold off Wednesday, weighed by the American Petroleum Institute’s surprise estimate of an 8.4-million-barrel build for the week ended June 5 late Tuesday, prompting renewed fears of a supply glut.
Investors will now look closely at the Energy Information Administration’s prediction, due later in the day.
At 2:00 AM ET, futures traded 1.5% lower at $38.37 a barrel. The international benchmark contract fell 1% to $40.76.
Elsewhere, rose 0.2% to $1,725.25/oz, while traded at 1.1364, up 0.2%.
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