By Peter Nurse
Investing.com – European stock markets are set to open higher Wednesday, boosted by signs of a global economic recovery, although gains are likely to be limited ahead of key U.S. employment data.
At 2:05 AM ET (0605 GMT), the contract in Germany traded 0.6% higher, in France climbed 0.7%, while the contract in the U.K. rose 0.8%.
U.S. manufacturing indicators pointed to an expanding sector on Tuesday, with the reading from the hitting its highest level in nearly two years.
Eurozone also grew last month, despite Spain slipping back into contraction, while Chinese signaled rising global demand for exports, a sign the world economy is recovering from the pandemic.
Meanwhile, the U.S. Federal Reserve has indicated that its accommodative policies will remain in place for some time. Fed Governor Lael Brainard said late Tuesday the central bank would need to provide more stimulus to fulfil its promise of stronger job growth and higher inflation.
With this in mind, investors will be keeping a close eye on the ADP Research Institute’s August , due at 8:15 AM ET (1215 GMT), ahead of Thursday’s weekly and Friday’s official U.S. monthly .
The ADP report is expected to show gains of 950,000 non-farm private sector jobs, a hefty jump from 167,000 in July.
Turning back to Europe, German continued the theme of encouraging economic data, growing by 0.9% on the month in July, rebounding from a fall of 1.6% the previous month.
In corporate news, Unilever (NYSE:) said Wednesday it would invest 1 billion euros to eliminate fossil fuels from its cleaning products by 2030.
The banking sector was also in focus, after the Swiss financial supervisor said it has opened enforcement proceedings against Credit Suisse (SIX:) over a 2019 spying affair, in which it hired investigators to track a departing manager. The Danish financial watchdog was also launching a probe into Danske Bank (CSE:) over its handling of debt collection errors.
Oil prices posted gains Wednesday, boosted by a larger-than-expected drop in stockpiles and signs of recovery in the manufacturing bases of both the U.S. and China, the two largest economies in the world.
U.S. fell by 6.4 million barrels last week to about 501.2 million barrels, the American Petroleum Institute said. Analysts had expected a draw of 1.9 million barrels.
Investors will now look to the Energy Information Administration’s later in the session to see if it paints the same picture.
U.S. crude futures traded 0.9% higher at $43.16 a barrel, while the international benchmark contract rose 0.9% to $45.98.
Elsewhere, fell 0.4% to $1,970.70/oz, while traded 0.1% lower at 1.1905.
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