European stocks traded higher on Wednesday, with a positive start to December.
Global stock markets have seen sharp losses as fears about the new coronavirus variant triggered a broad sell-off.
Favorably, stocks bounced back after Federal Reserve Charmain Jerome Powell guaranteed a rough end to November with a hawkish turn in Congress on Tuesday.
Powell said the U.S. central bank would likely discuss speeding up its “taper” of large-scale bond purchases at its next policy meeting amid a strong economy and expectations that a surge in inflation will persist until June next year.
Israeli Health Minister Nitzan commented that early data showed that those with three doses of the Pfizer (NYSE:PFE) Covid vaccine are well-protected against the new Omicron variant, adding to Tuesday’s sentiment in Congress.
What is tapering?
Tapering refers to the policy of unwinding the massive purchases of Treasuries and mortgage-backed securities adopted by the Fed since the outbreak of COVID-19.
Since March, the Fed has bought over $4 trillion worth of Treasurys and other securities in what is commonly known as quantitative easing. – theconversation.com
ECONOMIC DATA
The DAX in Germany traded 0.17% higher, the CAC 40 in France rose 0.16%, and the U.K.’s FTSE 100 climbed 1%.
China’s factory activity fell back into contraction in November, with the Caixin/Markit Manufacturing Purchasing Managers’ Index dropping to 49.9 in November from 50.6 the month before.
German retail sales fell 2.9% on the year in October, and crude prices traded higher Wednesday, recovering some hefty losses in the previous session.
Expectations are growing that members of OPEC+ will agree to pause plans to add 400,000 per day of supply in January, given the hit of demand amid potential restrictions on traveling.
Investors await crude oil supply from the U.S. Energy Information Administration after The American Petroleum Institute reported a fall of 747,000 barrels from U.S. crude inventories for last week.
Crude futures traded at $68.81 a barrel, up 4% from their 5.4% slump on Tuesday.
The Brent contract also rose 4.3% to 72.19 after its 3.9% fall during the previous session. Gold futures climbed 0.2% to $1.780.05/oz, and EUR/USD traded at 1.1305, 0.3% lower.
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