By Peter Nurse
Investing.com - European stock markets are set to post strong gains at the open Tuesday, helped by fresh moves by the Federal Reserve to support the U.S. economy, and by hope that the new surge in reported Covid-19 cases was under control.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 1.1% higher. France's CAC 40 futures were up 1.9%, while the FTSE 100 futures contract in the U.K. rose 1.6%.
The U.S. central bank said late Monday it will soon start purchasing individual corporate debt, in another effort to support the credit market as part of its emergency facilities introduced in the wake of the coronavirus pandemic.
Global equities had fallen sharply due to worries about the U.S. economy and confirmation of a new coronavirus cluster in China.
However, the Fed's move and data showing the outbreak in Beijing was being tamed--27 new coronavirus cases reported on Monday, down from 36 new cases the previous day--helped equities head higher.
New clusters of coronavirus are "always a concern", said Mike Ryan, the WHO's emergencies program head. "But what we do like to see is an immediate response to that and a comprehensive set of measures."
Adding to the positive tone was the news that the Bank of Japan, after a policy meeting, had increased the nominal size of its lending packages for cash-strapped firms to $1 trillion from about $700 billion announced last month.
Back in Europe, there are a number of economic releases due Tuesday.
The U.K. unemployment rate remained at 3.9% in April, better than expected with the country’s job retention schemes helping to limit the coronavirus-related damage. However, the claimant count in May was higher than expected, at 529,000.
German consumer price inflation remained in negative territory in May, which will concern the European Central Bank with its inflation-based mandate, and eyes will now be on the release of the key ZEW economic sentiment survey at 5 AM ET (0900 GMT).
Oil prices have edged higher, helped by the renewed enthusiasm in the equity markets, but gains are tentative.
At 2 AM ET, U.S. crude futures traded 0.1% higher at $37.13 a barrel. The international benchmark Brent contract rose 0.1% to $39.76.
Elsewhere, gold futures rose 0.1% to $1,729.25/oz, while EUR/USD traded at 1.1335, up 0.1%.