European Stocks Higher; Path to Brexit Agreement Seen

European stock markets traded higher Wednesday, amid optimism over a potential Brexit deal and ahead of the Federal Reserve’s final policy-setting meeting of the year.

At 4:05 AM ET (0905 GMT), the DAX in Germany traded 1.5% higher, the CAC 40 in France rose 0.9%, and the U.K.’s FTSE index climbed 1.2%.

U.K. and European Union continue to race against the clock to try and reach a post-Brexit trade deal. The European Union’s chief executive said on Wednesday that there had been progress and that the next few days would be critical.

“As things stand, I cannot tell you whether there will be a deal or not. But I can tell you that there is a path to an agreement now. The path may be very narrow but it is there,” European Commission President Ursula von der Leyen said.

Economic data have also been reasonably positive in Europe, despite the surge in coronavirus cases prompting new restrictions across the continent. Both French and German PMI data came in ahead of expectations for December, suggesting the region’s economy has shown resilience during this trying period.

The optimism in Europe follows an upbeat session in Asia after a strong close on Wall Street overnight. U.S. lawmakers continue to discuss the possibility of another stimulus package to help support the Covid-ravaged economy, while Moderna’s vaccine has moved closer to being authorized for emergency usage.

Additionally, the Federal Reserve concludes its final policy-setting meeting of the year later Wednesday. Faced with an economy slowing as the coronavirus outbreak worsens, the central bank has to consider whether to alter its asset purchase program to provide more support for growth.

In corporate news, Bang & Olufsen (CSE:BO) stock soared 19% after the Danish consumer electronics company lifted its full-year guidance, saying its fiscal first-half has been better than expected due to higher consumer demand for home entertainment.

Oil prices slipped back Wednesday following a surprise increase in U.S. inventories, putting the focus back on the impact on demand, given the tighter lockdowns caused by the surge in Covid-19 cases.

Crude stocks grew by almost 2 million barrels in the week to Dec. 11, according to industry group API, compared with the 3.5-million-barrel draw expected. Official government data are scheduled for later Wednesday.

U.S. crude futures traded 0.1% lower at $47.56 a barrel, while the international benchmark Brent contract fell 0.2% to $50.66.

Elsewhere, gold futures rose 0.6% to $1,865.80/oz, while EUR/USD traded 0.4% higher at 1.2205.