At 03:30 ET, the DAX index in Germany traded 0.1% lower, the CAC 40 in France traded up 0.1%, while the FTSE 100 in the U.K. climbed 0.8%.
European stocks were mostly up on Tuesday due to China's announcement that it will no longer require inbound travelers to go into quarantine starting January 8, a major step towards relaxing its stringent curbs. Hong Kong also announced further easing COVID measures on Wednesday, which could free up trade for European companies in the region.
However, investors are also considering the region's economic realities as the new year approaches. Growth is slowing, inflation remains at extremely elevated levels, and the European Central Bank is embarking on a path of monetary policy tightening. He added that it is important for both individuals and businesses to be prudent and focus on the long term.
Oil Prices Fall as Traders Assess COVID Situation in China and U.S. Refiners Resume Operations
Oil prices fell on Wednesday, giving back some of the previous session's gains, as traders evaluated the COVID situation in China, the largest importer of crude in the world. Crude prices soared on Tuesday after China relaxed restrictions for inbound travelers. Still, this optimism dissipated on Wednesday due to concerns that the relatively abrupt removal of these curbs will likely bring more economic disruption through the first quarter as infections surge, limiting demand for crude.
Additionally, oil refiners in the U.S. are working to resume operations after freezing weather hit many facilities across the country. By 03:30 ET, U.S. crude futures traded 0.8% lower at $78.90 a barrel, while the Brent contract fell 0.7% to $84.12. Both benchmarks had risen to their highest in three weeks on Tuesday.
Gold and EUR/USD Update
Gold futures fell 0.6% to $1,811.90/oz, while EUR/USD traded 0.1% higher at 1.0644.
Economic Headwinds in Europe as New Year Approaches
As the new year approaches, European investors are considering the region's economic realities. Growth is slowing, inflation remains at extremely elevated levels, and the European Central Bank is embarking on a path of monetary policy tightening. European Central Bank Vice President Luis de Guindos stated that the euro area is facing a "very difficult economic situation" that will test individuals and businesses. He added that it is important for both individuals and businesses to be prudent and focus on the long term.