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Stocks – Europe Seen Higher; Finance Ministers Meet

imageStock Markets2 hours ago (Jul 09, 2020 02:04AM ET)

(C) Reuters.

By Peter Nurse – European stock markets are set to edge higher Thursday, with investors hopeful of more government help to sustain the economic recovery while remaining wary of the mounting coronavirus cases ahead of the new earnings season.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.2% higher. CAC 40 futures in France were up 0.8%, while the FTSE 100 futures contract in the U.K. rose 0.6%.

Finance ministers from the euro area are due to meet virtually Thursday, ahead of a summit of their leaders on July 17-18, and there will be discussions over the bloc’s multi-year budget as well as a proposed 750 ($851 billion) euro recovery fund for economies hit hardest by Covid-19.

There is a degree of optimism within the market that a deal will be struck between the mainly northern European nations that want the funds to be made available primarily as loans, i.e. to be repaid, and those hardest hit, and more fiscally challenged, further south that seek grants.

On Wednesday the U.K. government detailed its latest pandemic economic rescue plan, with a sticker price of 30 billion pounds ($38 billion) aimed at getting consumers to support businesses as they reopen after three months of lockdown.

The need for this new injection of stimulus is becoming more apparent. Although Europe as a whole appears to have done a good job of containing the Covid-19 virus, the European Commission revised its economic forecasts for this year downward to show a contraction of 8.7% in the euro zone. There are now over 12 million global cases, according to Johns Hopkins University data, with a number of countries re-imposing lockdowns to curb fresh outbreaks.

The U.S., the world’s economic engine, has posted its largest number of daily new infections since the outbreak began, and investors will be wary of what the new earnings season will deliver when it begins in earnest next week.

Oil prices stagnated Thursday, despite U.S. government data showing Wednesday that gasoline stockpiles fell by much more than expected as demand climbed to its highest level since late March.

Prices have been held in a narrow band over the past two weeks as concerns about a spike in coronavirus cases globally tempers optimism about a recovery in fuel demand.

At 2:05 AM ET, U.S. crude futures traded 0.3% lower at $40.77 a barrel. The international benchmark Brent contract fell 0.2% to $43.20.

Elsewhere, gold futures rose 0.1% to $1,822.65/oz, while EUR/USD traded at 1.1364, up 0.3%.

Stocks – Europe Seen Higher; Finance Ministers Meet

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