European Stock Futures Lower; Covid Surge and Banking Sector in Focus

European Stock Futures Lower; Covid Surge and Banking Sector in Focus

European Stock Futures Lower; Covid Surge and Banking Sector in Focus © Reuters.

By Peter Nurse – European stock markets are seen opening largely lower Monday, weighed by growing concerns the third wave of Covid-19 cases will result in further lockdowns as well as weakness in the banking sector as Credit Suisse (SIX:CSGN) warns of a “highly significant” hit to results.

At 3:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.6% lower, the FTSE 100 futures contract in the U.K. fell 0.6%, while the CAC 40 futures in France climbed 0.1%.

Worries are growing that Europe's biggest economies will have to tighten their restrictions still more, further delaying the region’s economic recovery, after France posted its highest number for Covid patients in intensive care units this year on Sunday.

French President Emmanuel Macron has defended his decision to introduce partial measures targeting high-infection zones like Paris instead of a third full lockdown, but he did acknowledge that further restrictions would probably be needed.

Meanwhile, German Chancellor Angela Merkel threatened to invoke federal emergency powers to stop the spread of the disease after the 7-day average case number hit its highest since January. In Poland, the number of new cases hit an all-time record at the weekend, while case numbers continue to rise in Belgium, the Netherlands and Austria. By contrast, Italy's infection curve has flattened, while Czechia's is now in sharp decline after a spike in January and February.

The European Union is trying to speed up a lagging vaccination campaign, marred by shortfalls of AstraZeneca (NASDAQ:AZN) doses that have caused tension with former EU member Britain.

Elsewhere, the banking sector is likely to be in focus Monday after Credit Suisse warned of “highly significant” damage to its first-quarter results.

The Swiss banking giant said it had taken a knock from a large U.S. hedge fund that defaulted on margin calls last week, and that a number of other banks were also affected.

Earlier Monday Japan’s biggest investment bank Nomura (T:8604) flagged a possible $2 billion loss at a U.S. subsidiary, which the bank said stemmed from transactions with a U.S. client.

Oil prices retreated Monday as the container ship stuck in the Suez Canal was partially refloated, raising the possibility that it may be freed in the near future, thus unblocking the key waterway.

Prices rose more than 4% on Friday as traders tried to weigh the impact of the blockage of such a key route for global trade, with around 10% of global seaborne oil trade passing through the canal.

U.S. crude futures traded 2.3% lower at $59.59 a barrel, while the Brent contract fell 2.1% to $63.09. However, despite these losses, both benchmarks are still set to post a fourth consecutive quarterly gain this week.

Elsewhere, gold futures fell 0.3% to $1,728.05/oz, while EUR/USD traded 0.1% lower at 1.1779.

Original Article

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