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Investing.com – European stock markets are seen opening lower Wednesday, amid worries that the recent surge in coronavirus cases throughout the region will halt the nascent economic recovery even given the Covid-19 vaccine breakthroughs.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France dropped 0.4% and the FTSE 100 futures contract in the U.K. fell 0.5%.
Sentiment has weakened as the week has progressed as investors returned to the basic concept that large sections of many economies throughout Europe remain closed as governments react to a second wave of the Covid-19 pandemic.
On Tuesday, Scotland’s First Minister Nicola Sturgeon announced that large areas of the country would shut all non-essential shops from Friday to combat a rise in cases, mostly in the west of the country.
Equity markets had been given a boost Monday when Moderna (NASDAQ:MRNA) said its experimental Covid-19 vaccine was 94.5% effective in preventing infection, adding to Pfizer’s promising trial data last week.
However, an effective coronavirus vaccine will not fundamentally change European Central Bank economic projections, as a medical solution was already factored into forecasts, ECB President Christine Lagarde told a Bloomberg event on Tuesday.
Real GDP is projected to fall by 8.0% in 2020, according to the latest ECB staff projections, before rebounding by 5.0% in 2021 and by 3.2% in 2022.
While the deployment of vaccines could occur more quickly than earlier thought, the economy was also taking a bigger hit from the second wave of the pandemic than expected, Lagarde added.
In corporate news, Richemont (SIX:CFR) may be in focus after the Swiss luxury group said it plans to issue warrants as part of a shareholder loyalty scheme, following a cut to its dividend.
Oil prices weakened in the U.S. Wednesday after a jump in country’s inventories raised fears of a potential glut amid uncertainty over the output plans of the top producers for next year.
The industry body, the American Petroleum Institute, said late Tuesday that U.S. crude stockpiles rose by 4.2 million barrels last week, well above expectations for a build of 1.7 million barrels. Official supply data are due later in the session.
OPEC+, a group which includes members of the Organization of the Petroleum Exporting Countries as well as Russia, held a ministerial committee meeting on Tuesday. However, it made no formal recommendation over whether to reverse its previously agreed plan to boost output by 2 million barrels per day in January, ahead of a full meeting starting at the end of the month.
Crude futures traded 0.2% lower at $41.38 a barrel, while the international benchmark Brent contract rose 0.1% to $43.80.
Elsewhere, gold futures fell 0.3% to $1,879.00/oz, while EUR/USD traded 0.2% higher at 1.1879.
