European Stocks Seen Lower; More Lockdowns Weigh

This post was originally published on this site – European stock markets are seen opening lower Monday, with worries about new lockdowns in the region and uncertainty over the U.S. election outweighing strong economic data from China.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.4% lower, CAC 40 futures in France dropped 0.5% and the FTSE 100 futures contract in the U.K. fell 0.4%. 

The U.K. became the latest European country to reenter lockdown over the weekend, instituting a one-month stay-at-home policy for all of England to start Thursday, with the exception of schools, universities and essential stores, as the number of Covid-19 cases affecting its population surpassed one million. 

Germany and France imposed similar partial shutdowns last week, while Italy is likely to expand upon its current lockdown policies, with Prime Minister Giuseppe Conte set to speak to parliament later Monday.

European leaders are desperately trying to halt the surge in the virus before the holiday season at the end of the year, but these new measures risk sending the region’s economy back into recession just as a recovery looked in sight. As such, the final Eurozone manufacturing PMI at 4 AM ET (0900 GMT) may represent an interim high point in the current cycle.

Over in the U.S., Tuesday’s presidential election draws near. Democrat Joe Biden still maintains a comfortable lead over incumbent president Donald Trump in the national polls, but the polling in key swing states tends to be a lot closer, according to a WSJ-NBC poll. This has resulted in a great deal of uncertainty over not only the outcome, but also when the result will be confirmed and whether it will be accepted without rancor.

There has been some good news Monday, with data from China showing factory activity expanded at its fastest pace in a decade. The Caixin manufacturing Purchasing Managers Index for October rose to 53.6, as the second largest economy in the world recovered strongly from its virus-induced slowdown.

In corporate news, AngloGold Ashanti (JO:ANGJ) is likely to be in the spotlight after the gold producer said it will double its dividend payout ratio, helped by a jump in gold prices this year.

Additionally, easyJet (LON:EZJ) is considering options to bolster its finances, according to CEO Johan Lundgren, and is not against state support to help the airline get through the coronavirus pandemic.

Oil prices slumped Monday, with more lockdowns in Europe adding to fears that global demand will be severely hit by the second wave of coronavirus cases hitting the northern hemisphere.

Add in uncertainty surrounding the U.S. presidential election as well as the fact Libya’s oil production is rising rapidly toward one million barrels a day, and the outlook looks grim for the crude markets.

U.S. crude futures traded 4.3% lower at $34.27 a barrel, while the international benchmark Brent contract fell 3.7% to $36.52, hitting their lowest levels since May.

Elsewhere, gold futures rose 0.2% to $1,884.25/oz, while EUR/USD traded 0.1% lower at 1.1641.

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