European markets seen higher as investors await Powell testimony

Big 5

European markets are seen higher Wednesday as investors await a testimony from U.S. Federal Reserve Chairman Jerome Powell in the hope for hints on imminent interest rate cuts from the central bank.

The FTSE 100 is expected to edge around 2 points higher to 7,539, the DAX is seen around 7 points higher at 12,444 and the CAC 40 is also set nudge around 2 points higher to 5,575, according to IG data.

Powell is scheduled to testify in front of the House Financial Services Committee on Wednesday, a week after a stronger-than-expected jobs report for June dampened expectations that the Fed would take swift and decisive action on interest rates.

Stocks in Asia were mostly higher Wednesday afternoon, MSCI’s broadest index of Asia-Pacific shares outside Japan climbing 0.4%, while Japanese stocks slipped slightly in afternoon trade.

Investors will also be monitoring trade negotiations between the U.S. and China after White House economic adviser Larry Kudlow said officials from the world’s two largest economies had held a “constructive” phone conversation on Tuesday.

Meanwhile, tensions between traditional transatlantic allies have continued to simmer after U.S. President Donald Trump went after British Prime Minister Theresa May and her Washington ambassador after the envoy was revealed to have branded the White House “inept.”

In corporate news, Deutsche Bank shares continued to tumble as markets reacted skeptically to the German lender’s mass restructuring plan, which will drastically shrink its investment bank and shift focus to its domestic market.

Companies listed on the European blue chip Stoxx 600 index are expected to report 0.8% earnings growth in the second quarter, down sharply from a 1.8% estimate a week ago, according to data released on Tuesday from I/B/E/S Refinitiv.

Meanwhile Airbus deliveries have overtaken U.S. rival Boeing for the first time in eight years, making the company number one in the world after Boeing reports a 37% drop in deliveries for the first half of 2018.

In the U.K., Boris Johnson and Jeremy Hunt, rivals to become next prime minister, clashed over who could best handle Brexit on Tuesday in a testy television debate just two weeks before one will be named successor to Theresa May.

Source: CNBC

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