Europe heads lower on lockdown fears
European bourses are pressed as nations such as Germany and France mull national lockdowns in a bid to stem the spread of resurging coronavirus.
Share this:
European markets are heading for a weaker open after a mixed performance on Wall Street as earnings and the upcoming elections prompted a cautious tone to trading. European bourses are further pressed as nations such as Germany and France mull national lockdowns in a bid to stem the spread of resurging coronavirus.
A national lockdown, as we have seen in Q2, ravages an economy and would add significant complications to the economic recovery. Whilst Germany and France are considering a lighter version than the lockdown seen in March, tighter lockdown restrictions have already resulted in business activity in the Eurozone contracting, tougher measures would deepen this contraction further, particularly in the service sector.
These moves will up the pressure on the ECB to deliver more stimulus to support the bloc’s fragile economy. Attention will turn to tomorrow’s ECB meeting. Whilst it is probably still too early to see any further action from the ECB this month, there is a very good chance that the central bank will tee up the market for further asset purchases in December.
Oil slumps 3%
Oil majors will be in focus as covid cases surge in Europe and US the price of oil is tumbling lower. Oil has skidded over 3% lower in early trade, paring gains from the previous session. Elevated US crude inventories coupled with soaring coronavirus infections in the US and Europe hitting the demand outlook have prompted fresh selling in oil and the bears to take back control. With covid on the rise movement in Europe and North America will be greatly reduced over Autumn and the winter months bringing oil demand right back down again. The lack of US fiscal stimulus is adding to the gloomy outlook for demand. At the same time output is once again ramping up in Libya, at a time that is least needed.
Oil majors will be in focus as covid cases surge in Europe and US the price of oil is tumbling lower. Oil has skidded over 3% lower in early trade, paring gains from the previous session. Elevated US crude inventories coupled with soaring coronavirus infections in the US and Europe hitting the demand outlook have prompted fresh selling in oil and the bears to take back control. With covid on the rise movement in Europe and North America will be greatly reduced over Autumn and the winter months bringing oil demand right back down again. The lack of US fiscal stimulus is adding to the gloomy outlook for demand. At the same time output is once again ramping up in Libya, at a time that is least needed.
Next upgrades FY profits (again)
British clothes retailer Next has impressed by upgrading its annual profit guidance after sales grew by more than expected in the third quarter. Full price sales jumped +2.8% in Q3 an Next now expects full year pre-tax profits to be £365 million, up £65 million from guidance in September.
Next’s sophisticated online offering has helped the online retailer to weather one of the most challenging storms seen by the retail sector in recent times. Next now does more than half of its sales online making it one of the few bricks and mortar retailers to successfully transition into e-commerce in a significant way.
The outlook for Next is still extremely challenging, particularly with tighter lockdown restriction being brought in and the prospect of Christmas being cancelled. The risk that an extending economic slowdown could see customers move away from the mid-market price point towards cheaper alternatives could also grow.
FTSE Chart
European markets are heading for a weaker open after a mixed performance on Wall Street as earnings and the upcoming elections prompted a cautious tone to trading. European bourses are further pressed as nations such as Germany and France mull national lockdowns in a bid to stem the spread of resurging coronavirus.
A national lockdown, as we have seen in Q2, ravages an economy and would add significant complications to the economic recovery. Whilst Germany and France are considering a lighter version than the lockdown seen in March, tighter lockdown restrictions have already resulted in business activity in the Eurozone contracting, tougher measures would deepen this contraction further, particularly in the service sector.
These moves will up the pressure on the ECB to deliver more stimulus to support the bloc’s fragile economy. Attention will turn to tomorrow’s ECB meeting. Whilst it is probably still too early to see any further action from the ECB this month, there is a very good chance that the central bank will tee up the market for further asset purchases in December.
Oil slumps 3%
Oil majors will be in focus as covid cases surge in Europe and US the price of oil is tumbling lower. Oil has skidded over 3% lower in early trade, paring gains from the previous session. Elevated US crude inventories coupled with soaring coronavirus infections in the US and Europe hitting the demand outlook have prompted fresh selling in oil and the bears to take back control. With covid on the rise movement in Europe and North America will be greatly reduced over Autumn and the winter months bringing oil demand right back down again. The lack of US fiscal stimulus is adding to the gloomy outlook for demand. At the same time output is once again ramping up in Libya, at a time that is least needed.
Oil majors will be in focus as covid cases surge in Europe and US the price of oil is tumbling lower. Oil has skidded over 3% lower in early trade, paring gains from the previous session. Elevated US crude inventories coupled with soaring coronavirus infections in the US and Europe hitting the demand outlook have prompted fresh selling in oil and the bears to take back control. With covid on the rise movement in Europe and North America will be greatly reduced over Autumn and the winter months bringing oil demand right back down again. The lack of US fiscal stimulus is adding to the gloomy outlook for demand. At the same time output is once again ramping up in Libya, at a time that is least needed.
Next upgrades FY profits (again)
British clothes retailer Next has impressed by upgrading its annual profit guidance after sales grew by more than expected in the third quarter. Full price sales jumped +2.8% in Q3 an Next now expects full year pre-tax profits to be £365 million, up £65 million from guidance in September.
Next’s sophisticated online offering has helped the online retailer to weather one of the most challenging storms seen by the retail sector in recent times. Next now does more than half of its sales online making it one of the few bricks and mortar retailers to successfully transition into e-commerce in a significant way.
The outlook for Next is still extremely challenging, particularly with tighter lockdown restriction being brought in and the prospect of Christmas being cancelled. The risk that an extending economic slowdown could see customers move away from the mid-market price point towards cheaper alternatives could also grow.
FTSE Chart
Related tags:
Latest market news
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
EUR/USD, FTSE 100 Forecast: Two trades to watch 1507
EUR/USD rises after weaker US CPI, PPI up next. FTSE 100 falls as weak China GDP data hits miners.
FTSE 100, USD/JPY Forecast: Two trades to watch
FTSE eases modestly despite inflation unexpectedly holding steady. USD/JPY drifts lower ahead of the FOMC rate decision.
EUR/USD, FTSE 100 Forecast: Two trades to watch 21-05-26
EUR/USD slips below 1.16 as weak eurozone data weighs on sentiment. FTSE 100 slips as oil prices rebound and caution returns.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.