European Stock Future Lower; Consolidating On Covid Concerns

Investing.com - European stock markets are seen opening lower Friday, ending a generally positive week on a cautious note amid concerns that growing Covid-19 cases will stunt economic growth.  

At 2:15 AM ET (0715 GMT), the DAX futures contract in Germany traded 0.6% lower, CAC 40 futures in France dropped 0.6% and the FTSE 100 futures contract in the U.K. fell 0.4%.

European Central Bank President Christine Lagarde warned Thursday that ever-increasing Covid-19 numbers and restrictive measures, such as lockdowns, to curb the spread of the virus could challenge the region’s economic outlook.

Lagarde also indicated more clearly than ever that the ECB would not use the full amount of its chief bond buying program if it doesn't need to.  

European governments are having to cope with a surge in Covid-19 cases, with Britain, for example, posting a fresh record in daily deaths on Wednesday, for the second day running.  

British Prime Minister Boris Johnson said on Thursday that it was too early to say when the national coronavirus lockdown in England will end, after researchers warned that this lockdown appeared to be having little impact on rates of the coronavirus in the first 10 days.

U.K. retail sales disappointed in December, climbing just 0.3% on the month, compared with expectations of a rise of 1.2%. This still represented an improvement from November’s fall of 3.8%.

The final PMI figures for Europe for January are scheduled for later in the session and are expected to show a slowdown in the services sector during these periods of lockdown.

Equity markets have posted strong gains so far this week, reflecting relief over an orderly transition of power in the United States and strong expectations that U.S. stimulus will provide continued support for global assets.

Oil prices weakened Friday on concerns that a rise of Covid-19 cases in China, the world’s largest consumer, will severely impact demand given the reintroduction of restrictive measures.

Shanghai reported the first locally transmitted cases in two months on Thursday, while Beijing is now urging tens of millions of urban workers not to travel back to their largely rural families during the upcoming Lunar New Year holiday.

The U.S. Energy Information Administration is due to release its weekly inventory report on Friday, a couple of days later than usual, and follows the American Petroleum Institute recording the country’s crude inventories rising 2.6 million barrels earlier in the week.

U.S. crude futures traded 1.3% lower at $52.46 a barrel, while the international benchmark Brent contract fell 1.2% to $55.45. 

Elsewhere, gold futures fell 0.3% to $1,861.05/oz, while EUR/USD traded 0.1% lower at 1.2158.

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