By Peter Nurse
Investing.com - European stock markets are seen opening higher Friday, with investors looking beyond record deaths from Covid-19 cases and U.S. political turmoil and expecting a strong economic recovery in the second half of the year.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.7% higher, CAC 40 futures in France climbed 0.9% and the FTSE 100 futures contract in the U.K. rose 0.3%.
Wall Street hit record highs on Thursday. Investors are looking to the incoming Democratic-controlled U.S. government for additional fiscal spending, while European economies are also set to get a boost from the European Recovery Fund.
“2021 is starting on the wrong foot, with the eurozone economy still struggling,” said ING analyst Peter Vanden Houte, in a research note. “But even though the vaccination process will be drawn-out, we believe that from the second quarter and beyond, some of the excess savings households built up in 2020 will be unleashed, boosting consumption.”
With this in mind, investors are prepared to overlook the rising number of Covid-19 cases: Germany recorded the most fatalities since the pandemic started, the associated national lockdowns throughout Europe and the hesitant start to the vaccination program. The U.S. also notched over 4,000 deaths in a single day for the first time.
Additionally, late Thursday President Donald Trump finally conceded that President-elect Joe Biden would take control of the White House later this month, for the first time condemning the violence that broke out on Wednesday when his supporters stormed the U.S. Capitol while lawmakers were confirming Biden’s election victory.
Turning to economic data, German industrial production rose 0.9% in November, ahead of expectations, but the key economic release will be the December U.S. nonfarm payrolls number, after Wednesday’s ADP release suggested the country’s jobs recovery had ended.
In corporate news, Swiss banking giant Credit Suisse (SIX:CSGN) said it expects to book a net loss for its fourth quarter after increasing its provisions for a long-running legal dispute in the United States by $850 million.
Oil prices edged higher Friday, continuing the bullish tone created by Saudi Arabia’s surprise announcement earlier this week that it would voluntarily cut output by one million barrels per day for the next two months.
This move has helped to allay worries over declining fuel demand due to the pandemic surge and the associated increase in restrictive measures.
U.S. crude futures traded 0.7% higher at $51.16 a barrel, while the international benchmark Brent contract rose 0.6% to $54.72. Both benchmarks are on track to post gains of around 5% this week, and are trading around the highest levels seen since February last year.
Elsewhere, gold futures fell 0.3% to $1,908.40/oz, while EUR/USD traded 0.1% lower at 1.2263.