European stocks traded higher on Wednesday, with a positive start to December.

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Global stock markets have seen sharp losses as fears about the new coronavirus variant triggered a broad sell-off.  

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Favorably, stocks bounced back after Federal Reserve Charmain Jerome Powell guaranteed a rough end to November with a hawkish turn in Congress on Tuesday.

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Powell said the U.S. central bank would likely discuss speeding up its “taper” of large-scale bond purchases at its next policy meeting amid a strong economy and expectations that a surge in inflation will persist until June next year.

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Israeli Health Minister Nitzan commented that early data showed that those with three doses of the Pfizer (NYSE:PFE) Covid vaccine are well-protected against the new Omicron variant, adding to Tuesday’s sentiment in Congress.

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What is tapering?

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Tapering refers to the policy of unwinding the massive purchases of Treasuries and mortgage-backed securities adopted by the Fed since the outbreak of COVID-19.  

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Since March, the Fed has bought over $4 trillion worth of Treasurys and other securities in what is commonly known as quantitative easing. – theconversation.com

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ECONOMIC DATA

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The DAX in Germany traded 0.17% higher, the CAC 40 in France rose 0.16%, and the U.K.’s FTSE 100 climbed 1%.

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China’s factory activity fell back into contraction in November, with the Caixin/Markit Manufacturing Purchasing Managers’ Index dropping to 49.9 in November from 50.6 the month before.

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German retail sales fell 2.9% on the year in October, and crude prices traded higher Wednesday, recovering some hefty losses in the previous session.

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Expectations are growing that members of OPEC+ will agree to pause plans to add 400,000 per day of supply in January, given the hit of demand amid potential restrictions on traveling.

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Investors await crude oil supply from the U.S. Energy Information Administration after The American Petroleum Institute reported a fall of 747,000 barrels from U.S. crude inventories for last week.

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Crude futures traded at $68.81 a barrel, up 4% from their 5.4% slump on Tuesday.

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The Brent contract also rose 4.3% to 72.19 after its 3.9% fall during the previous session. Gold futures climbed 0.2% to $1.780.05/oz, and EUR/USD traded at 1.1305, 0.3% lower.

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