By Peter Nurse
Investing.com - European stock markets are seen opening higher Monday, as strong economic data from Japan and China fueled optimism of a global recovery even despite the increasing strain on health systems in Europe and the U.S.
At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.6% higher, but CAC 40 futures in France climbed 1.1% and the FTSE 100 futures contract in the U.K. rose 0.4%.
Japan’s economy rebounded sharply in the third quarter, data showed on Monday. It grew by 5% on the quarter, better than the 4.4% growth expected, and by an annualized 21.4%, pulling the world's third-largest economy out of recession.
Adding to the positive tone were better-than-expected industrial output numbers from China, as well as signs its important retail sector was recovering.
A weekend trade deal also fostered hopes of a fuller recovery from the Covid shock for at least the Asia-Pacific regional economy, with 15 Asia-Pacific economies - including China and Japan, but not the United States - agreeing to reduce future tariffs.
Influential investment bank Morgan Stanley (NYSE:MS), in an outlook for 2021, recommended that investors overweight equities and corporate bonds, citing an expected “V-shaped” economic recovery, greater clarity on Covid-19 vaccines and continued policy support.
Still, the coronavirus pandemic continues to cause pain throughout much of the northern hemisphere, with the number of coronavirus cases in the United States, for example, crossing the 11-million mark on Sunday. Case numbers have risen by 2 million in only two weeks.
In Europe, Germany must live with “considerable restrictions” against the spread of Covid-19 for at least four to five months, the country’s economy minister Peter Altmaier warned on Sunday.
British Prime Minister Boris Johnson is self-isolating after coming into contact with someone who tested positive for Covid-19. He had been admitted to intensive care earlier this year with the virus.
In corporate news, BBVA (MC:BBVA) is set for gains after Reuters reported that PNC Financial (NYSE:PNC) is nearing an all-cash deal to buy the U.S. business of the Spanish lender for more than $10 billion. That's nearly half of the bank's market capitalization as of Friday's close.
Oil prices pushed higher Monday, as traders look ahead to the upcoming meeting of the world’s top producers for a further extension of supply curbs to counter the hit to demand from the surge in coronavirus infections.
The Organization of the Petroleum Exporting Countries and their allies, including Russia, also known as OPEC+, has been cutting production by about 7.7 million barrels per day to support prices. It had planned to increase output by 2 million barrels per day from January, but this move is increasingly seen as unlikely to happen.
OPEC+ is due to hold a ministerial committee meeting on Tuesday which could recommend changes to production quotas when all the ministers meet on Nov. 30 and Dec. 1.
U.S. crude futures traded 1.4% higher at $40.70 a barrel, while the international benchmark Brent contract rose 1.2% to $43.28.
Elsewhere, gold futures fell 0.1% to $1,885.45/oz, while EUR/USD traded 0.2% higher at 1.1850.