By Peter Nurse
Investing.com - European stock markets are set to weaken Thursday, amid concerns about the impact on unemployment from the coronavirus pandemic as investors still wait for a massive rescue package to pass through the U.S. political process.
At 3:15 ET (0715 GMT), the DAX futures contract in Germany traded 2.2% lower. France's CAC 40 futures were down 2.7%, while the FTSE 100 futures contract in the U.K. fell 2.5%.
The Senate finally managed to pass a stimulus package to the tune of $2 trillion late Wednesday, and the fate of the bill now rests with the House of Representatives. A vote there is not expected until Friday.
This would represent the largest emergency aid package in U.S. history and the most significant legislative action taken to address the rapidly intensifying coronavirus crisis, which is bringing much of the U.S. economy -- still seen as the engine for the global economy -- to a halt.
The weekly jobless claims report, at 8:30 AM ET (1230 GMT), is set to offer the clearest evidence yet of the pandemic’s devastating impact on the U.S. economy.
A huge number is expected, especially after California’s state governor Gavin Newsom said Wednesday that more than a million people from his state alone had filed for unemployment this month.
According to a Reuters survey of economists, initial claims for state unemployment benefits surged to 1 million for the week ended March 21, which would eclipse the previous record of 695,000 set in 1982. Estimates in the survey were as high as 4 million, which would dwarf the 281,000 applications received during the week ended March 14.
In Europe, French business confidence plunged at a record pace in March thanks to shutdowns related to the coronavirus.
The Bank of England hosts its scheduled March meeting later Thursday. However, the central bank has already made two emergency cuts to interest rates this month, as well as boosting its bond-buying program, and thus is likely to hold off on further action.
In corporate news, Airbus (PA:AIR) announced Thursday that it’s reducing the production of aircraft wings for three weeks as it slows operations to put in place extra health and safety measures due to the coronavirus outbreak.
Oil headed lower Thursday, still under pressure as the coronavirus pandemic continues to slow economic growth and oil demand, the latest blow to which came in the shape of India announcing a three-week lockdown earlier this week. Late Wednesday, the U.S. Energy Information Administration reported a rise in crude oil inventories of 1.6 million barrels in the week-ended March 20.
At 3:15 AM ET, U.S. crude futures traded 3.2% lower at $23.70 a barrel. The international benchmark Brent contract fell 2.0% to $26.84.
Elsewhere, gold futures fell 0.7% to $1,622.60/oz, while EUR/USD traded at 1.0908, up 0.3% on the day.