By Peter Nurse
Investing.com - European stock markets edged largely lower Wednesday ahead of the conclusion of the Federal Reserve’s two-day policy meeting, with BMW and Volkswagen (DE:VOWG_p) helping the German market outperform.
At 4:10 AM ET (0910 GMT), the DAX in Germany traded 0.1% higher, but the CAC 40 in France fell 0.1% and the U.K.'s FTSE index dropped 0.4%.
BMW (DE:BMWG) stock soared 5%, climbing to its highest level in a year, after the German automaker said it expects a significant year-on-year increase in pretax profit in 2021 as it forecast a strong performance in all of its segments.
Staying in the sector, Volkswagen (DE:VOWG) stock climbed over 10% after the company said it expects its 2021 deliveries, sales and earnings to come in above the previous year's level, as it announced the start of its new strategy to deliver more than 450,000 electrified cars this year.
Away from this, the tone in Europe has been more subdued with France entering a third wave of the Covid-19 pandemic, French Prime Minister Jean Castex told his country’s parliament Tuesday.
This followed the Robert Koch Institute warning earlier Tuesday that coronavirus infections are spreading exponentially in Germany, up 20% in the last week.
France and Italy said on Tuesday they will resume distribution of the AstraZeneca (NASDAQ:AZN) vaccine if the European Medicines Agency says again that the vaccine is safe for use. The EMA has already approved the drug once and repeated at a press conference on Tuesday that the benefits of the vaccine outweigh any risks. Germany and others have yet to reverse their suspensions.
Away from Europe, the Federal Reserve concludes its latest two-day meeting later Wednesday and is scheduled to release new economic and interest rate forecasts. With the Biden administration’s $1.9 trillion stimulus package yet to have its impact, the market is beginning to anticipate interest rates rising sooner than in 2024, as the central bank’s current guidance suggests.
Other central bank meetings are also scheduled this week, with the Bank of England on Thursday and the Bank of Japan's two-day get together concluding Friday.
Oil prices drifted lower Wednesday, selling off despite the surprise fall in U.S. crude inventories of 1 million barrels last week, as detailed by the American Petroleum Institute.
U.S. stockpiles had been rising as February’s unexpected cold snap in the southern states had knocked out a significant portion of the country's refining capacity.
Official data from the Energy Information Administration are due later in the session, and will be studied carefully for confirmation of this crude drawdown.
U.S. crude futures traded 0.2% lower at $64.66 a barrel, while the Brent contract fell 0.4% to $68.11.
Elsewhere, gold futures rose 0.1% to $1,732.95/oz, while EUR/USD traded 0.1% higher at 1.1905.