By Peter Nurse
Investing.com - European stock markets are set to open lower Friday, with investors taking a cautious stance ahead of the weekend despite hopes of more stimulus as the coronavirus pandemic continues to reap damage throughout the region.
At 3:10 AM ET (0710 GMT), the DAX futures contract in Germany traded 2.5% lower. France's CAC 40 futures were down 1.7%, while the FTSE 100 futures contract in the U.K. also fell 1.7%.
The number of Covid-19 infections have continued to mount worldwide, to well above 500,000, but the news from Italy, the epicenter of the outbreak in Europe, has been disappointing as infections surged Thursday by 6,153, the most in five days.
Recent numbers from the northern region of Lombardy suggested the epidemic might be slowing in this key area. But poorer southern parts are now seeing a sharp rise in deaths, raising fears the health service there could be overwhelmed.
The news in Spain isn’t much better, while Germany is feeling the impact of the pandemic with cases rising Friday by 5,780, compared with the previous day.
Still, the $2 trillion U.S. stimulus package is expected to be voted by the House of Representatives later Friday, and Federal Reserve Jerome Powell - while conceding the U.S. "may well already be in a recession" -insisted the central bank still had plenty of ammo after it ramped up its bond-buying program earlier this week.
Leaders from the Group of 20 economies also pledged to pump $5 trillion into the world economy at a meeting Thursday.
European governments are also spending billions of euros trying to shore up their economies amid the coronavirus crisis, noted ING analyst Bert Colijn, in a research note, and “although there's little coordination between eurozone member states, the plans are similar and it's likely we'll see yet more financial pledges before this is over.”
The need for stimulus was amply illustrated with the release of the U.S. initial claims data Thursday, which showed the number of Americans applying for unemployment benefits surged to a record 3.28 million last week.
There’s little in the way of economic data due in Europe Friday, but investors could keep an eye on the University of Michigan’s March consumer confidence release, at 10:00 AM ET (14:00 GMT).
The March consumer sentiment index is expected to drop to 90 from the preliminary measure of 95.9, according to economists’ forecasts compiled by Investing.com.
Oil has rebounded to a degree Friday, helped by the idea of additional stimulus in order to support demand as the coronavirus pandemic continues to slow economic growth.
At 3:10 AM ET, U.S. crude futures traded 1.2% higher at $22.87 a barrel. The international benchmark Brent contract fell 0.5% to $26.20.
Elsewhere, gold futures fell 0.9% to $1,635.80/oz, while EUR/USD traded at 1.1051, up 0.2% on the day.