Stocks – Europe Seen Higher; EU Summit in Focus

imageStock Markets12 hours ago (Jul 17, 2020 02:04AM ET)

(C) Reuters.

By Peter Nurse – European stock markets are seen edging higher Friday, amid hopes for additional stimulus for the region as new coronavirus case numbers continue to rise globally.

At 2 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.3% higher, the FTSE 100 futures contract in the U.K. rose 0.2%, while CAC 40 futures in France climbed 0.1%.

European Union leaders meet later Friday to seek agreement over a proposed recovery fund to help the countries hard hit by the coronavirus outbreak to rebuild.

The current 750-billion euro ($850 billion) proposal sees a split of 500 billion in grants and 250 billion in loans, which would mark a major step towards fiscal integration in Europe. This is likely to face opposition from some richer, mainly northern European nations, but has the backing of both Germany and France..

“We are not confident that an agreement will be reached this weekend, but we expect it to be reached before the European Commission starts its summer holidays in August,” said Danske Bank.

The European Central Bank President Christine Lagarde warned Thursday that further “ample stimulus” was needed to counter high uncertainty around efforts to combat the virus and mitigate the economic impact.

In the U.S., political leaders are set to begin debating such another recovery package next week, as several states in the country’s south and west implement fresh lockdown measures to curb the virus while some existing programmes to support businesses are set to expire within weeks.

This comes as the U.S. reported in a fresh daily record of new virus cases, of over 77,000, according to a Reuters tally, but there have also been surges in other major economies, such as Brazil and India.

In corporate news, Ericsson (ST:ERICb) will be in focus Friday after maintaining its full-year guidance. The company stands to benefit from the backlash in the West against its main competitor, Huawei.

Saab (ST:SAABb) also stated that second-quarter net profit rose 20%, as sales exceeded expectations and orders increased sharply.

Oil prices edged lower Friday, as the U.S., the largest consumer of crude in the world, posted another all-time record on Thursday for new coronavirus cases. Cases are rising in 41 states, while 25 states have recorded a daily increase in Covid-19 fatalities.

Earlier in the week the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, agreed to scale back oil production cuts from August to 7.7 million barrels a day until December, from the 9.7 million barrels per day seen since May.

At 2:05 AM ET, U.S. crude futures traded 0.2% lower at $40.67 a barrel, while the international benchmark Brent contract fell 0.3% to $43.27.

Elsewhere, gold futures were largely flat at $1,800/oz, while EUR/USD traded flat at 1.1382.

Stocks – Europe Seen Higher; EU Summit in Focus

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