European stock futures edge higher; Eurozone services PMI data in focus

© Reuters.

By Peter Nurse

Investing.com - European stock markets are expected to open higher Wednesday, continuing the positive start to the new year ahead of the release of more important economic data.

At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.3%, while the FTSE 100 futures contract in the U.K. also rose 0.3%.

The start of the year is packed with a string of economic data. European stocks closed higher on Tuesday, helped by German inflation coming in below expectations, easing for a second month in a row in December due to falling energy prices.

The economic numbers to digest Wednesday include French inflation figures and services PMI data for the Eurozone, while in the U.S. there are more employment numbers scheduled as well as the minutes from the last Federal Reserve meeting.

Investors will likely comb through the report for any hints on what Fed policymakers are thinking on the direction of interest rates. The current market sentiment is expecting a quarter-percentage point increase in the benchmark rate at the Fed's next meeting, while divergence between doves and hawks regarding how high the terminal rate should go will also be of interest.

Oil prices fell Wednesday, continuing the weak start to the new year, on concerns that economic activity will be hit by a global recession and thus weigh on demand in 2023.

This followed comments by the head of the International Monetary Fund, who warned that much of the global economy would see a tough year in 2023 as the main engines of global growth - the United States, Europe, and China - are all experiencing weakening activity.

The industry group American Petroleum Institute is scheduled to release weekly data on U.S. crude inventories later in the session, a day later than usual following Monday’s holiday.

By 02:00 ET, U.S. crude futures traded 0.7% lower at $76.41 a barrel, while the Brent contract fell 0.6% to $81.62. Both contracts fell over 4% on Tuesday.

Additionally, gold futures rose 0.5% to $1,854.65/oz, while EUR/USD traded 0.2% higher at 1.0568.