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European stocks edge higher ahead of UK budget - European stock markets edged higher Wednesday in cautious trading, as investors awaited the U.K. Budget as well as congressional testimony from Federal Reserve Chair Jerome Powell, ahead of a European Central Bank rate-setting meeting later in the week.

At 03:10 ET (08:10 GMT), the DAX index in Germany traded 0.1% higher, the CAC 40 in France traded largely flat, while the FTSE 100 in the U.K. climbed 0.1%.

Powell’s upcoming testimony limits activity

European equities have started the session on a positive note, helped by stronger than expected German trade data for January, but investors appear to be wary of getting too involved ahead of the start of testimony from Fed chief Jerome Powell in front of Congress starting later in the session.

Powell’s comments are likely to be closely studied for clues as to if and when the U.S. central bank is ready to start cutting interest rates.

German exports rose in January

Back in Europe, German exports rose more than expected at the start of the year thanks to rising demand from EU countries and China, rising by 6.3% in January compared with the previous month. 

This result has offered hope that the worst of the slowdown affecting the region’s largest economy might be over, lifting sentiment.

Eurozone January retail sales figures are also due later in the session, and are expected to show a steadying after December’s sharp fall.

The European Central Bank meets on Thursday, and is widely expected to leave interest rates at a record 4%. The focus is set to be on when rates might start to fall, following eurozone inflation slipping closer to the central bank’s 2% medium-term target in February.

Also of interest will be the announcement of the British government's budget, at which Chancellor Jeremy Hunt is expected to cut some taxes, in an attempt to boost his party’s waning popularity, while trying to avoid a backlash from the bond markets.

Legal & General lifts its dividend 

In the corporate sector, Legal & General (LON:LGEN) stock fell 3% after the U.K. life insurer reported disappointing operating profit for 2023 amid a "challenging" economic environment, although it also announced plans to increase its dividend by 5% a year.

“We remain confident in our ability to deliver resilient, organic growth, supported by our strong competitive positioning in attractive and growing markets,” said CEO Antonio Simoes, in a statement.

888 Holdings (LON:888) stock rose 0.5% after the U.K. gaming company said it was looking at options for its direct-to-consumer U.S. operations, including a potential sale or controlled exit.

Crude supported by signs of tightening supply

Oil prices edged higher Wednesday, rebounding after recent losses, helped by signs of supply tightening even with ongoing demand growth concerns in China and the U.S., the world's two biggest crude consumers.

Saudi Arabia, the world's biggest oil exporter, announced on Wednesday slightly higher prices for April crude sales to Asia, its biggest market. 

This followed Sunday’s announcement that the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will extend its output cuts of 2.2 million barrels per day until the end of the second quarter.

By 03:10 ET, the U.S. crude futures traded 0.5% higher at $78.55 a barrel, while the Brent contract climbed 0.4% to $82.38 a barrel. 

But benchmarks had seen selling over the last couple of sessions, not helped by China's disappointing economic growth target for 2024 of around 5%.

The official U.S. government inventory report is due later in the session, and follows Tuesday’s report from the American Petroleum Institute industry group showing U.S. crude stocks rose by 423,00 barrels in the week ended March 1, much smaller than the expected increase of 2.1 million barrels.

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