European markets head for muted open ahead of PMI data

European stocks are expected to open around the flatline on Wednesday with investors in the region awaiting key Purchasing Managers’ Indexes from the euro zone.

London’s FTSE is seen opening 1 point higher at 7,098, Germany’s DAX 15 points higher at 15,659, France’s CAC 40 down 2 points at 6,616 and Italy’s FTSE MIB up 76 points at 25,251, according to IG.

European markets are awaiting the first reading of activity in the services and manufacturing sectors in the euro zone and U.K. for June. The “flash” or preliminary data — a useful gauge of economic health in two key sectors in the region — for the single currency area is due at 9 a.m. London time.

The more cautious open for Europe comes after a bumper start to the week for global stocks. U.S. stock index futures were mildly higher during early morning trading on Wednesday, after the S&P 500 closed shy of a new record on Tuesday, and shares in Asia-Pacific were largely higher in Wednesday trade.

Market sentiment appeared to be given a boost when Federal Reserve Chairman Jerome Powell testified before the House of Representatives on Tuesday and reiterated that inflation pressures will be temporary.

In prepared remarks released Monday evening, the central bank chief reiterated that the economy is growing, although the threat of the pandemic is still present.

Bitcoin will also be in focus for investors given its volatile session on Tuesday, with the cryptocurrency at one point dipping below $30,000 and erasing its gains for 2021. But bitcoin ultimately recouped all of the more than 11% loss and finished the session in positive territory, according to data from Coin Metrics.

There are no major earnings releases in Europe Wednesday.

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