European stocks gain as investors eye Fed minutes

European stocks traded higher Wednesday as investors await minutes from a meeting of the U.S. Federal Reserve, while President Donald Trump suggested he was weighing measures to boost the world’s largest economy.

The pan-European Stoxx 600 climbed 0.8% by mid-morning, autos leading gains with a 1.8% jump as all sectors and major bourses traded firmly in positive territory.

A meeting of the Federal Open Market Committee (FOMC) is in focus as investors seek hints from the U.S. central bank over the prospect of impending monetary policy easing, with minutes due for release this evening.

Meanwhile, President Trump reiterated on Tuesday that he was not prepared to make a trade deal with China amid the current standoff, with Chinese telecommunications giant Huawei still firmly in Washington’s cross hairs.

However, he also said he was “thinking about” cutting payroll taxes, less than a day after the White House denied that a payroll tax cut was being discussed.

European investors will be monitoring Italian markets Wednesday after Prime Minister Giuseppe Conte resigned, kickstarting consultations between President Sergio Mattarella and party leaders in the hope of a solution to the political crisis.

The country’s coalition government has been hanging by a thread since Deputy Prime Minister Matteo Salvini announced the end of his cooperation with coalition partner the Five Star Movement (M5S) and called for fresh elections.

Italy’s FTSE MIB index shrugged off political uncertainty to jump 1% in early trade.

Asian markets largely declined on Wednesday after Wall Street pulled back overnight on rising recession fears, with Japanese indexes leading losses.

Britain’s tumultuous exit from the European Union remains on investors’ radar, with British Prime Minister Boris Johnson accusing his EU counterparts of being “a bit negative” but reiterating hopes of reaching a new deal before October 31.

Johnson is set to meet German Chancellor Angela Merkel Wednesday as he seeks flexibility from EU leaders over the Irish backstop, having received a strong rebuke from European Council President Donald Tusk on Tuesday.

Germany will auction a 30-year bond with a 0% interest rate for the first time on Wednesday. The bond sale expected to take place at 10:30 a.m. London time will mean the German government will not make any interest payments to those buying the bond until it matures in August 2050.

Pandora continued to surge Wednesday following a strong session on Tuesday as second-quarter results showed promising recovery signs. The Danish jeweler’s stock added a further 14.3% during morning trade.

French household appliances maker SEB gained 5.2% after Citi initiated the company’s stock with a “buy” rating, citing strong positioning as a market leader along with improving margins, while Germany’s GEA Group climbed 5.2% after Goldman Sachs upgraded the stock to “buy”.

At the other end of the European blue chip index, British energy giant Wood Group slipped 3.4% after announcing that it would offload its nuclear business for £250 million ($303.65 million) in a bid to reduce debt.

source: CNBC