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 DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 0.7%, while the FTSE 100 futures contract in the U.K. rose 0.8%.
U.S. manufacturing indicators pointed to an expanding sector on Tuesday, with the reading from the Institute for Supply Management hitting its highest level in nearly two years.
Eurozone manufacturing activity also grew last month, despite Spain slipping back into contraction, while Chinese factory data 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 jobs report, due at 8:15 AM ET (1215 GMT), ahead of Thursday’s weekly jobless claims and Friday’s official U.S. monthly employment report.
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 retail sales provided a negative surprise, falling 0.9% on the month in July, and June's data were also revised downward.
In corporate news, Unilever (NYSE:UL) 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:CSGN) 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:DANSKE) over its handling of debt collection errors.
Oil prices posted gains Wednesday, boosted by a larger-than-expected drop in U.S. crude 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. crude inventories 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 release 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 Brent contract rose 0.9% to $45.98.
Elsewhere, gold futures fell 0.4% to $1,970.70/oz, while EUR/USD traded 0.1% lower at 1.1905.