By Peter Nurse
European stock markets are set to open mixed Wednesday, with investors generally upbeat about the economic recovery but wary as cases of the coronavirus continue to mount.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.1% higher. France's CAC 40 futures were down 0.5%, while the FTSE 100 futures contract in the U.K. fell 0.7%.
Stocks in Europe have rallied hard since hitting a low in March, with gains driven by hefty central bank stimulus around the globe and a gradual easing of restrictions despite a clearly negative outlook for many companies' earnings.
Hopes for an economic recovery were supported Tuesday by upbeat surveys of manufacturing and services, with France a stand-out as lockdown loosening there led to a modest return to growth.
“To some extent, this is obviously a technical rebound. The fact that PMIs are still in contractionary territory illustrates the two messages: a sense of relief that a sharp rebound is possible but at the same time caution against too much optimism,” said analysts at ING, in a research note.
However, while the number of Covid-19 cases are much lower throughout most of Europe, several U.S. states are seeing record infections and the death toll in Latin America passed 100,000 on Tuesday, according to a Reuters tally.
The key economic indicator due for release Wednesday will be the influential German Ifo Business Climate survey for June, at 4 AM ET (0800 GMT). Optimism is seen recovering, as June’s flash PMI data pointed to further signs of a turnaround in the German economy.
In corporate news, Dufry (SIX:DUFN), the operator of duty-free shops, said Wednesday that it would cut staffing costs by 20% to 35% to reflect previously forecast potential sales declines of between 40% and 70% on the back of the coronavirus pandemic.
Oil edged lower Wednesday after hitting a three-month high on Tuesday, with investors digesting a second consecutive week of increases in U.S. crude supplies.
The American Petroleum Institute estimated a build of 1.749 million barrels for the week ended June 19 on Tuesday, much bigger than the 300,000 barrel build expected. Attention now turns to the government figures due at 8:30 AM ET (1230 GMT).
At 2:05 AM ET, U.S. crude futures traded 0.3% lower at $40.26 a barrel. The international benchmark Brent contract fell 0.1% to $42.60.
Elsewhere, Gold futures rose 0.2% to $1,785.70/oz, while EUR/USD traded at 1.1322, up 0.1%.
