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European Stock Futures Higher; Yellen Testimony in Focus

·2-min read

By Peter Nurse - European stock markets are seen opening higher Tuesday, boosted by optimism in the U.S. in the runup to President-elect Joe Biden’s inauguration.

At 2:20 AM ET (0720 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France climbed 0.5% and the FTSE 100 futures contract in the U.K. rose 0.4%.

Secretary of the Treasury nominee Janet Yellen will testify before the Senate Finance Committee later Tuesday as part of her Senate confirmation hearing, and is set to defend the $1.9 trillion Covid-19 relief plan unveiled by President-elect Joe Biden during the past week.

"Neither the President-elect, nor I, propose this relief package without an appreciation for the country's debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs," Yellen will say, according to prepared remarks, released to the press.

There have been fears that the relief plan, designed to boost growth in the world’s largest economy, would have to be watered down to get through opposition from Republican lawmakers in the Senate.

Back in Europe, the Covid-19 virus continues to cause havoc. France's average daily new infections hit a six-and-a-half week high on Monday, Portugal's daily death toll reached a record high, while in Germany Vice-Chancellor Olaf Scholz called for an extension and tightening of lockdown measures that are due to expire on Jan. 31.

Attention will turn Tuesday to the release of the latest survey of economic sentiment from Germany’s ZEW, to try and gauge the impact of the recent restrictions on mobility to combat the virus.

Logitech (NASDAQ:LOGI) raised its 2021 outlook for sales growth and profit for the third time, with the Swiss-U.S. computer peripherals maker now expecting sales growth for the full year at 57%-60% and adjusted operating income of $1.05 billion.

The auto sector will also be in focus Tuesday, after passenger car registrations fell by 3.3% in December in the European Union, and 23.7% during the whole of 2020, the largest ever fall.

Oil prices were mixed Tuesday, as traders having to balance signs of growth in China, the world’s largest crude importer, and optimism over U.S. stimulus measures with fears for fuel demand as Covid-19-induced lockdowns continue globally.

U.S. crude futures traded 0.2% higher at $52.53 a barrel, while the international benchmark Brent contract rose 0.9% to $55.24. There was no settlement for the U.S. contract on Monday as American markets were closed for a public holiday.

Elsewhere, gold futures rose 0.3% to $1,835.85/oz, while EUR/USD traded 0.1% higher at 1.2088.

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Australia stocks higher at close of trade; S&P/ASX 200 up 1.19%