European Stock Futures Largely Flat; Coronavirus Developments Eyed

This post was originally published on this site – European stock markets are seen opening largely unchanged Wednesday, with investors keeping a wary eye on developments surrounding the coronavirus while monitoring the U.S. political turbulence.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany and the CAC 40 futures in France traded less than 0.1% higher and the FTSE 100 futures contract in the U.K. rose 0.1%.

The near-term outlook for the European economy darkened on Tuesday after a report by the newspaper Bild suggested German Chancellor Angela Merkel wanted to extend the current lockdown in Europe’s largest economy through the end of March. 

“It seems the December trading enthusiasm, driven by the prospect of a global economic recovery, is now being offset by alarming Covid-19 numbers as well as valuation concerns over stocks that went far away from their equilibrium price,” said Pierre Veyret, a technical analyst with ActivTrades, in a morning note.

Global equity markets have posted strong gains over the last few weeks, boosted by low interest rates and monetary and fiscal stimulus from central banks and governments alike, but also the idea that vaccinations were coming.

Later Wednesday, the U.S. House of Representatives is set to vote to impeach President Donald Trump over the recent turmoil in the U.S. Capitol. Vice President Mike Pence resisted pressure on Tuesday to invoke the 25th Amendment to remove Trump, saying it would not be the country’s best interest. An impeachment trial could proceed even after Trump leaves office on Jan. 20.

Back in Europe, trading updates are expected from retailers Sainsbury’s, Persimmon (LON:PSN) and ASOS (LON:ASOS), while Spanish telecom company Telefonica (NYSE:TEF) has agreed to sell its mobile phone masts in Europe and Latin America to U.S.-based telecom infrastructure operator American Towers for 7.7 billion euros ($9.41 billion) in cash. 

November industrial production figures for the euro zone are also due. The euro-area economy is poised to shrink again at the start of this year as the resurgent pandemic plunges the region into a double-dip recession.

Oil prices continued to climb Wednesday, boosted by industry data showing a larger-than-expected draw in U.S. inventories, again suggesting that the U.S. measures to contain the latest surge in the pandemic had had less effect on demand than those in Europe.

Oil stocks in the U.S. dropped by 5.8 million barrels last week, data from the American Petroleum Institute showed late Tuesday, more than the expected fall of 2.7 million barrels. The government agency, the Energy Information Administration, releases its data later Wednesday.

U.S. crude futures traded 0.9% higher at $53.70 a barrel, while the international benchmark Brent contract rose 1% to $57.14. Both benchmarks are trading at their highest levels since February.

Elsewhere, gold futures rose 0.8% to $1,858.95/oz, while EUR/USD traded 0.1% higher at 1.2215.

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