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European Stock Futures Mixed; Covid Worries Resurface

This post was originally published on this site – European stock markets are seen opening in a mixed fashion Monday, as investors digest conflicting signals of strong Chinese growth and fresh Covid-19 worries ahead of a key Federal Reserve meeting.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.2% lower, while CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. rose 0.4%.

Earlier Monday, data showed economic activity in China soared at the start of the new year as the world’s second largest economy recovered from the ravages of the coronavirus pandemic. 

Industrial production grew 35.1% year-on-year in February and retail sales climbed 33.8% year-on-year in February, although the unemployment rate was at 5.5%, higher than the previously recorded 5.2%.

Investors are also expecting strong growth figures out of the U.S. in the months to come, particularly after President Joe Biden signed the $1.9 trillion stimulus package into law last week and with the rollout of Covid-19 vaccinations proceeding at pace.

However, the mood in Europe is more circumspect. On Friday, the head of Germany’s public health agency warned that a third wave of coronavirus infections has begun, while Italy is set to impose another national lockdown over the Easter weekend.

Additionally, a number of European countries, with Ireland becoming the latest, have suspended the use of AstraZeneca’s Covid-19 vaccine after reports of serious blood clotting in recipients.

Although both the European Medicines Agency and the World Health Organisation have dismissed the concerns, this suspension will undoubtedly add to the delays in rolling out vaccines within the European Union.

The Federal Reserve meets this week, and investors are starting to fret that rising inflation expectations could prompt the U.S. central bank to signal it will start raising rates sooner than originally envisaged.

The 10-year U.S. Treasuries yield stood at 1.635%, having risen to as high as 1.642% on Friday, a high last seen in February last year.

The Bank of England and the Bank of Japan also hold rate-setting meetings this week, but the main focus will be on the Fed.

In corporate news, Roche (SIX:RO) will be in the spotlight after the Swiss pharmaceutical giant announced Monday plans to buy GenMarkDiagnostics, a U.S.-based maker of molecular diagnostic tests, in a $1.8 billion deal.

Oil prices climbed Monday, with the international benchmark Brent heading towards $70 a barrel on signs of strong Chinese economic growth, pointing to more demand from the world’s largest importer of oil.

U.S. crude futures traded 0.6% higher at $65.99 a barrel, while the Brent contract rose 0.5% to $69.57, not far removed from the 13-month high seen last week.  

Elsewhere, gold futures rose 0.2% to $1,723.75/oz, while EUR/USD traded 0.2% lower at 1.1932.

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