By Peter Nurse
Investing.com - European stock markets are seen opening lower Friday, with investors weighing increased Covid-related restrictions with the announcement of additional U.S. stimulus.
At 2:10 AM ET (0710 GMT), the DAX futures contract in Germany traded 0.4% lower, CAC 40 futures in France dropped 0.7% and the FTSE 100 futures contract in the U.K. fell 0.4%.
Overnight U.S. President-elect Joe Biden proposed a $1.9 trillion stimulus plan to boost the world's largest economy, which has been hit hard by the Covid-19 pandemic.
His proposal included increasing the additional federal unemployment payments, direct payments to many Americans, more aid to state and local governments and additional funding for Covid testing and vaccination programs.
This relief bill had been widely expected, especially after the Democrats won control of the Senate in early January as well as holding the House of Representatives.
Back in Europe, France announced Thursday it will bring forward its night curfew by two hours for at least a fortnight, while Germany’s government is weighing up tougher lockdown restrictions as countries throughout the continent try to slow the spread of the virus.
Italy, the euro-zone’s third-biggest economy, is not only suffering from a resurgent coronavirus outbreak but also a deepening political crisis, after former Prime Minister Matteo Renzi pulled his Italia Viva party out of the ruling coalition government, denying it its majority in parliament.
In corporate news, SAP (DE:SAPG) was set to open strongly after reporting a hefty rise in operating cash flow and raising its forecasts, while U.K. software group Aveva (LON:AVV) also reported a 26% rise in currency-adjusted revenue in the fourth quarter.
Also in the U.K. British American Tobacco (LON:BATS) said it had closed a three-year investigation into suspected bribery by company executives.
Looking at economic data, U.K. GDP fell 2.6% in November, back to 8.5% below the levels seen in February 2020, with the service sector acting as the main drag on growth, but this was not as bad as the 5.7% drop expected.
Oil prices weakened Friday amid concerns about a resurgence of Covid-19 cases in China, the world’s largest crude importer, with the country reporting the highest number of daily cases in more than 10 months on Friday. This has prompted the lockdown of more than 28 million people this week, potentially hitting demand hard.
That said, both crude benchmarks remain well above $50 a barrel, not far removed from 10-month highs, helped by additional fiscal stimulus, Covid-19 vaccine breakthroughs and a recent pledge by Saudi Arabia to deepen output cuts.
U.S. crude futures traded 0.9% lower at $53.08 a barrel, while the international benchmark Brent contract fell 1.3% to $55.69.
Elsewhere, gold futures fell 0.1% to $1,849.10/oz, while EUR/USD traded 0.1% lower at 1.2143.