© Reuters.
By Peter Nurse
Investing.com – European stock markets are expected to open higher on Wednesday, hoping for further stimulus and economic recovery in the second half despite a host of concerns from the coronavirus worsening civil unrest in United States.
At 2 a.m. (0600 GMT), the contract in Germany was trading 0.9% higher. France increased 1.4%, while the UK contract increased 1.1%.
Earlier on Wednesday, a closely watched survey of service sector activity in China showed that its index returned to pre-epidemic levels in May. This adds to various signs of recovery in business activity as governments slowly restart their economies.
In addition, the European Central Bank is expected to accelerate the purchase of stimulating bonds at its meeting on Thursday, and this after the European Commission announced last week a recovery plan of 750 billion euros (830 billion dollars) .
“The good times continue to roll in the risky markets,” said Mazen Issa, senior FX strategist at TD Securities, in a report. “As intense as the rally was, it should continue as the scale of the equity rally has now spread outside the United States.”
However, there are a variety of risks that could hamper the global economy, including a second wave of Covid-19 infections, strong Sino-American tensions and mounting social unrest in the United States following protests against police brutality .
Lufthansa (DE 🙂 on Wednesday recorded a hefty net loss of 2.1 billion euros (2.35 billion dollars) in the first quarter due to the pandemic. The German airline agreed last week to 9 billion. state euro rescue package.
AXA (PA 🙂 has decided to cut its dividend in half for 2019 and the French insurance giant forecasts that the coronavirus pandemic will have a negative impact on this year’s results by around 1.5 billion euros ( $ 1.67 billion).
Many economic data should be released on Wednesday in Europe, including indices for the region, as well as for Germany and the euro area.
“The dynamics of the labor market will be an important determinant of the depth and duration of the current crisis. So far, job losses in Europe have been more modest than in the United States, thanks in part to short-time working plans, “said Danske Bank analysts in a note to customers.
Oil prices posted further gains on Wednesday, climbing to nearly three-month highs in the optimism that major producers will extend production cuts later this week.
The American Petroleum Institute reported on Tuesday evening that the US oil stock fell by 483,000 barrels for the week ended May 29.
At 2:00 am ET, the futures contract rose 3.5% to $ 38.09 a barrel, while the international benchmark contract increased 2.4% to $ 40.52. These contracts reached the highest levels since March 6.
Elsewhere, the price fell 0.4% to $ 1,727.95 / oz, while trading at 1.1210, up 0.4%, its highest level near. three months.
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