European stock markets are trading in a mixed-to-negative manner on Wednesday despite upbeat economic data as coronavirus-related uncertainty persists. Also, traders are cautious ahead of the U.S. ADP data and FOMC meeting minutes due later today. According to analysts’ estimates, the report will show that 2.9 million private-sector jobs were added in June. Also on the data front, the Caixin China manufacturing PMI rose to a six-month high of 51.2 in June from 50.7 in the previous month. In Europe, the final Eurozone manufacturing PMI climbed to 47.4 from 39.4 in May.
Elsewhere, the ECB executive board member Fabio Panetta said that the Eurozone has so far weathered the virus shock as well as could be expected. Meanwhile, Ifo institute said it expects a gradual recovery in the German economy after the pandemic slump. Also, there are reports that Italy plans to pass another €20 billion in economic stimulus this month. On the negative side, Austria reported the highest daily new coronavirus infections since April. Also, cases continue to escalate in the U.S., where several states are now reimposing lockdown measures.
Against this backdrop, the UK’s FTSE 100 sheds 0.52% to 6,137. Italy’s FTSE MIB edges lower by 0.70 percent to 19,240, France’s CAC 40 loses 0.93 percent to 4,890, while German DAX 30 declines by 0.51 percent to 12,247. U.S. stock index futures are trading lower, signaling that the market will start the third quarter on a tepid note amid fresh negative developments on the coronavirus front.
In currencies, the greenback is mixed amid the lingering uncertainty and conflicting signals. EURUSD failed to derive support from decent economic data out of the Eurozone and dipped into negative territory in recent trading after a rejection from intraday highs around 1.1250. as a result, the common currency is once again threatening the 1.12 handle as bullish attempts attracted profit-taking amid mostly negative risk sentiment. Later in the day, traders will focus on the US ADP employment data ahead of the key jobs report due on Friday.
Elsewhere, Brent crude resumed the ascent after a brief pause seen on Tuesday. The prices registered intraday highs around $42.60. According to the data released by the American Petroleum Institute late on Tuesday, crude inventories dropped by 8.2 million barrels to 537 million barrels last week. Official inventory data from the EIA is due out later today. Also on the positive side is the report that the OPEС oil production hit the lowest level in 20 years last month.
Nathan Lambert, Head of Global FX Analytical Department