By Peter Nurse
Investing.com - European stock markets are seen edging higher at the open Tuesday, following Wall Street higher as fears of a broader fallout from the U.S. hedge fund default ease. Concerns about a surge of Covid-19 cases in the region will limit gains.
At 3:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. rose 0.3%.
The Dow Jones Industrial Average closed 0.3%, or 98 points, higher Monday at a new record, while the S&P 500 was 0.1% lower and the Nasdaq Composite ended down 0.6%.
Banks tied to the Archegos saga fell, dragging broader financials indices into the red, but losses were limited and eased fears that the issue would become systemic.
Gains in Europe are still likely to be limited as the region struggles to cope with a third wave of Covid-19 cases, causing many countries to tighten restrictive measures, delaying its economic recovery further.
Germany needs to act quickly to stop infections jumping to 100,000 a day from 20,000 now, according to its top public health official, yet German Chancellor Angela Merkel is facing growing criticism for failing to spell out such a plan.
In France, Finance Minister Bruno Le Maire said "all options are on the table" to protect the public.
The news is more positive in the U.K., where the vaccination program has been more successful, as a stay-at-home order and some other lockdown measures have been lifted in England. Prime Minister Boris Johnson still urged the population to be cautious, having warned last week that Europe's wave was likely to "wash up on our shores" sooner or later.
The economic data slate Tuesday largely centers on eurozone economic sentiment and consumer confidence data for March, and these releases will be studied for further clues on how the region’s economic prospects are perceived.
Oil prices edged lower Tuesday as shipping resumed through the Suez Canal and the focus turned to the meeting of the Organization of Petroleum Exporting Countries and its allies, a grouping known as OPEC+, later this week.
The market is expecting the surge of Covid cases in Europe, not to mention the rising numbers in important emerging markets like India and Brazil, to keep the cartel from increasing supply levels to any great degree when they get together on Thursday.
Also on the supply side, U.S. crude oil supply numbers from the American Petroleum Institute are due later in the day.
U.S. crude futures traded 0.5% lower at $61.25 a barrel, while the Brent contract fell 0.5% to $64.59.
Elsewhere, gold futures fell 0.6% to $1,704.80/oz, while EUR/USD traded flat at 1.1762.