Investing.com – European stocks rose on Wednesday as investors digested comments from Federal Reserve Chairman Jerome Powell amid a volatile political climate.
As of 3:15 a.m. ET (7:15 a.m. GMT), prices were up 0.6% in Germany, up 0.6% in France and up 0.5% in the UK.
Powell warns of rising inflation
European sentiment improved on Wednesday after the Federal Reserve chairman signaled progress towards curbing inflation, raising hopes that the U.S. central bank will start cutting interest rates in the near future.
Speaking at a European Central Bank event in Portugal on Tuesday, Powell said the Fed has made “significant progress” in returning inflation to 2 percent, noting that the labor market, a key driver of inflation, is showing signs of “cooling” and wage growth is moderating toward “more sustainable levels.”
The ECB’s governing council and executive director are due to speak at the same event later on Wednesday, but the euro zone’s central bank is likely to delay further cuts in borrowing costs after cutting interest rates last month, and data on Tuesday showed the key services sector of euro zone inflation remains elevated.
Euro zone services figures for June are due to be released later in the session and are expected to remain in expansionary territory.
Politics has a big influence in France and the UK
Investors are also keeping a close eye on all things political, with parliamentary elections coming up in France and the UK.
France is holding key legislative runoff elections on Sunday, and although the far-right National Rally party won the popular vote last weekend, it remains unclear whether it will govern France, given potential political maneuvering between rival parties in the coming days.
Britain goes to the polls on Thursday amid growing expectations of a landslide victory for the opposition Labour Party.
Such an outcome would restore stability after 14 years of bitter political turmoil under Conservative governments and could even lead to a rebuilding of trade relations with Europe.
GSK buys rights to vaccine candidate
GSK (LONDON:) shares were slightly lower on Wednesday after the British pharmaceutical company acquired all rights to develop and manufacture influenza and COVID-19 vaccine candidates using messenger RNA technology from CureVac for just over $1 billion.
Shares in telecommunications company Vodafone (NASDAQ:) rose slightly after the company and Virgin Media O2 struck a new network-sharing deal in the U.K. that also includes a spectrum migration plan that could help Vodafone win regulatory approval for its partnership with mobile operator Three.
Oil prices rise as U.S. stockpiles fall
Oil prices rose on Wednesday, boosted by industry data showing a larger-than-expected drawdown in inventories.
By 3:15 a.m. ET, U.S. crude oil futures (WTI) were trading up 0.5% at $83.20 a barrel, while futures were up 0.5% at $86.67 a barrel.
Both indexes fell from their highest levels since late April the previous trading day as concerns eased that Hurricane Beryl would disrupt production in the Gulf of Mexico.
An industry group released data on Tuesday showing that U.S. crude oil inventories fell by just over 9 million barrels in the week ended June 28, a much larger-than-expected drop.
The Energy Information Administration is scheduled to release official weekly data later in the session.
In the United States, the world’s largest oil consumer, gasoline demand is expected to increase due to this week’s Independence Day holiday.
