European stock markets are expected to open higher Wednesday, continuing the global rally after Fed Chairman Jerome Powell indicated confidence in the U.S. economic recovery but didn’t point to an accelerated path towards policy normalization.
At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.7% and the FTSE 100 futures contract in the U.K. rose 0.6%.
The main equity indices closed higher Tuesday, with the tech-heavy Nasdaq Composite leading the way, and this positive tone has been matched in Asia overnight.
At his confirmation hearing for a second term in charge of the U.S. central bank, Powell stated that the economy could handle tighter monetary policy even in the face of the new Covid-19 surge. He, however, did not announce a quicker change in policy from what had already been signalled, to the market’s relief.
A new test of sentiment is expected later Wednesday with the release of the U.S. CPI data for December, which is expected to come in hot, climbing to 7% year-on-year.
Back in Europe, Germany reported a new daily record for Covid-19 cases on Tuesday, illustrating that the Omicron variant continues to run wild through the continent.
More than half of people in Europe could contract the new variant in the next two months if infections continue at current rates, the World Health Organisation said.
In corporate news, Dutch health technology company Philips (AS:PHG) said it expected fourth-quarter core profit to drop around 40%, hit by a global shortage of electronic components and the fallout from a massive recall of ventilators.
Just Eat Takeaway (AS:TKWY), Europe’s largest meals delivery company, reported fourth-quarter order growth of 14%, and maintained its financial forecasts for 2022.
Oil prices stabilized Wednesday after the sharp gains of the previous session pushed benchmark contracts to their highest levels since the highly transmissible Omicron variant emerged in late November. Powell’s testimony also gave the market a boost.
The FTSE MIB climbed up by 0.19% to 27,587.20. In the cash markets, the DAX Germany was trading up by 0.13% to 15,961.65. CAC 40 in France rose by 0.07% to 7,189.37 while the FTSE 100 in the U.K. was up by 0.58% to 7,534.35 ,at the time of writing.