By Peter Nurse
Investing.com - European stock markets are seen opening largely lower Friday, as optimism surrounding a potential Covid vaccine dissipates in the face of increasing numbers of coronavirus infections and the prospect of more economic pain.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% higher, but CAC 40 futures in France dropped 0.5% and the FTSE 100 futures contract in the U.K. fell 1.1%.
“Equities have stopped taking comfort from commercial reports of vaccine progress, and in the absence of peer-reviewed approval and regulatory licensing, have started focusing again on the daily case numbers,” said ING analyst Robert Carnell, in a research note.
“And here, the news is terrible. Further lockdowns and restrictions are probably only days away in some jurisdictions. In others, they are already underway.”
The United States has reported fresh daily records for new Covid-19 case hospitalizations this week, and the news in Europe is - at least in parts - equally grim. The U.K. reported 33,470 new cases on Thursday, the highest daily total to date, while Italy and Germany are struggling to flatten their infection curves. However, there have been clear successes in bringing down infection rates in Spain, the Low Countries and especially Ireland.
European Central Bank President Christine Lagarde cautioned Thursday that the region’s economy still faced difficult times despite the vaccine breakthrough.
"From a huge river of uncertainty, we see the other side now," Lagarde said in a panel discussion. "But I don't want to be exuberant about this vaccination because there is still uncertainty" about the production and distribution of the vaccine.
Investors will look at the latest iteration of the third-quarter European growth figures later in the session, after the first estimate showed seasonally adjusted GDP increased by 12.7% in the euro area and by 12.1% in the EU, compared with the previous quarter.
In corporate news, French healthcare giant Sanofi (NASDAQ:SNY) plans to invest into Jeito Capital, an investment firm dedicated to biotech and biopharma, while Germany's Daimler (OTC:DDAIF) plans to build Mercedes-Benz-branded Actros heavy trucks for the first time in China.
Oil prices weakened Friday, weighed by a surprise jump in U.S. crude stockpiles as coronavirus infections continued to rise at an alarming pace, prompting a tightening of restrictions on economic and social lift from California to Chicago and New York. The governors of Ohio, Iowa and Utah - all Republicans - all issued mask-wearing mandates.
American crude inventories rose by 4.28 million barrels, compared with an expected fall of just under one million barrels, according to data from the Energy Information Administration on Thursday.
A somber forecast from the International Energy Agency also added pressure, as it cut its global oil demand projections for this quarter by 1.2 million barrels a day, saying Covid vaccines won’t provide a boost until well into 2021.
U.S. crude futures traded 1.8% lower at $40.39 a barrel, while the international benchmark Brent contract fell 1.4% to $42.94. Both contracts are still up close to 9% this week after the jump inspired by the Pfizer (NYSE:PFE) vaccine news earlier in the week.
Elsewhere, gold futures rose 0.2% to $1,877.60/oz, while EUR/USD traded flat at 1.1805.