European Factors to Watch-Shares seen edging up ahead of Yellen
LONDON Feb 11 (Reuters) - European stocks were seen edging higher on Tuesday, set to continue a week-long rebound from six-week lows as investors looked to the new U.S. Federal Reserve chair to reassure markets over policy.
At 0725 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were all 0.5 percent higher.
The pan-European FTSEurofirst 300 and the euro zone blue-chip EuroSTOXX 50 are both up 3 percent since hitting their lowest levels since mid-December last Tuesday.
Janet Yellen will face U.S. lawmakers on Tuesday in her first test as chair of the Federal Reserve, where some stern Fed critics will want to know how committed she is to winding down the Fed's monetary stimulus.
While she is not expected to signal any deviation from the "tapering" of equity-friendly asset purchases, she may indicate that the Fed's forward guidance of low rates needs tweaking, given that the unemployment rate is near the central bank's target well before the Fed is inclined to raise rates again.
"Although she is known for her staunch dovish support for ultra easy monetary policy, there doesn't appear to be any possibility that she will scale back on the Fed's tapering program as some are speculating," Jonathan Sudaria, trader at London Capital Group, said in a note.
"The rapid decline in the unemployment rate now sees it hovering just above the Fed's target level ... However, the main reason for this has been people dropping out of the labour force, so bulls may be looking for some sort of 're-phrasing' or even lowering of the threshold to bring it more into line with the real economy."
Recent gains have come despite a slight deterioration in the earnings season, where around 40 percent of companies have now missed expectations for either earnings or revenues, up from a third that had missed on an earnings basis and a quarter that missed on revenues a few weeks ago. Continuación...