European Stock Futures Edge Higher; German GDP Rebounds

European stock markets are expected to edge higher at the open Tuesday, helped by a strong handover from Wall Street after the full approval of a Covid-19 vaccine as well as signs of strong German growth.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.4% and the FTSE 100 futures contract in the U.K. rose 0.1%.

Helping the sentiment on the European markets Tuesday were the strong gains on Wall Street overnight, with the tech-heavy Nasdaq Composite jumping 1.6% to a record closing high, after the U.S. Food and Drug Administration granted full approval to the Covid-19 vaccine developed by Pfizer (NYSE:PFE) and BioNTech (DE:22UAy).

Surging numbers of coronavirus cases caused by the highly contagious delta variant have fueled concerns that the U.S. economic recovery will be stunted, but this move could accelerate inoculations as companies mandate jabs in order to return to the office.

Back in Europe, the German economy grew a little faster than expected in the second quarter, by 1.6% on the quarter, climbing 9.4% on the year, according to the country’s final reading on the economy’s rate of growth. That’s a sharp rebound from the first quarter’s decline but it has been overshadowed by the Bundesbank’s announcement on Monday that the country may miss full-year growth targets due to the delta variant.

Investors are also keeping a wary eye on the situation in Afghanistan, with leaders from the Group of Seven industrial countries set to hold a virtual meeting later Tuesday to discuss the situation.

However, the main focus this week will be on the Federal Reserve’s Jackson Hole symposium that opens on Aug. 26, where further clues on the timeline for the U.S. central bank’s planning on asset tapering and interest rate hikes are expected.

In corporate news, the U.K. grocery market is likely to remain in focus after WM Morrison (LON:MRW) agreed to CD&R’s new $9.54 billion takeover bid, while rival J Sainsbury ‘s (LON:SBRY) stock soared Monday following a report that private equity firms were also looking at this chain.

Elsewhere, oil prices edged higher, continuing Monday’s sharp rebound with the U.S. regulatory body’s full approval of the Pfizer/BioNTech Covid-19 vaccine boosting hopes that greater vaccination levels will lead to a boost in fuel demand.

Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day, amid expectations for a hefty fall in inventories ahead of Labor Day weekend.

By 2:05 AM ET, U.S. crude futures traded 0.3% higher at $65.86 a barrel, while the Brent contract rose 0.4% to $68.63. Both contracts jumped more than 5% on Monday after recording their biggest week of losses in more than nine months last week.

Additionally, gold futures rose 0.1% to $1,805.05/oz, while EUR/USD traded largely flat at 1.1744.