European Stock Futures Largely Lower as Rising Yields Weigh

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Investing.com – European stock markets are seen opening largely lower Friday, following the lead from Wall Street as rising U.S. bond yields again startled investors along with fresh concerns over the Covid-19 pandemic.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% higher, but CAC 40 futures in France dropped 0.7% and the FTSE 100 futures contract in the U.K. fell 0.7%.

There was a sharp selloff on Wall Street on Thursday, with the tech-heavy Nasdaq Composite index dropping over 2%, after Federal Reserve Chair Jerome Powell made it clear that the central bank wouldn’t be changing its ultra-loose monetary policy any time soon.

Some investors had expected Powell to signal his willingness to adjust the Fed’s asset purchase program to combat rising yields, as they could bring higher borrowing costs and limit a fragile U.S. economic recovery.

The February U.S. jobs report is due at 8:30 AM ET (1330 GMT), and will be studied closely, with the addition of 182,000 payrolls expected, compared with just 49,000 in January.

Adding to the concerns Friday were worries about a potential shortage of vaccines globally after a shipment of 250,000 doses of AstraZeneca’s drug that were destined for Australia was blocked by Italy under a new European Union regulation. 

Additionally, more than a dozen U.S. states have reported increases in hospitalizations for the coronavirus, threatening to reverse a national trend that has pushed in-patient numbers to the lowest level for months.

This comes a few days after the World Health Organization warned that the number of new coronavirus infections globally rose last week for the first time in seven weeks.

In corporate news, Stellantis (PA:STLA), the world’s fourth largest car maker, announced late Thursday it will begin the distribution of the stake it still holds in components group Faurecia (PA:EPED) to its shareholders.

Oil prices pushed higher Friday, continuing the sharp gains of the previous session, following the decision of the Organization of the Petroleum Exporting Countries and allies not to increase output in April.

The group, known collectively as OPEC+, approved the continuation of current curbs on production at its ministerial meeting on Thursday, with small exemptions for Russia and Kazakhstan, in the face of rising oil prices over the last couple of months.

The next OPEC+ meeting will take place on April 1, where May’s production levels will be discussed.

U.S. crude futures traded 1.5% higher at $64.81 a barrel, while the international benchmark Brent contract rose 1.7% to $67.85, its highest since 2019. Both contracts surged more than 4% on Thursday,  

Elsewhere, gold futures fell 0.3% to $1,695.45/oz, while EUR/USD traded 0.1% lower at 1.1951.