European stock markets are seen opening largely lower Tuesday, as worries about increasing Covid-related lockdowns overshadowed optimism about the rollout of coronavirus vaccinations.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded flat, CAC 40 futures in France dropped 0.4% and the FTSE 100 futures contract in the U.K. fell 1.1%.
Late Monday, the U.K. government imposed tighter Covid-19 restrictions on London, citing increased infection rates that may be partly linked to a new variant of the coronavirus.
This follows news that Germany will enter a lockdown from Wednesday that will see the closure of non-essential stores, The Netherlands has announced a new five-week lockdown, while Italy is considering more stringent restrictions over the Christmas holidays.
Across the Atlantic, the number of coronavirus deaths in the United States passed 300,000 on Monday, with large parts of California closed down and New York City Mayor Bill de Blasio warning that the city should be prepared for a full shutdown.
All of this has diluted the optimism generated by the United States authorizing the emergency use of its first Covid-19 vaccine, developed by Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX), on Friday. The vaccine has already been authorized in a handful of countries, including Britain and Canada.
Elsewhere, European Union negotiator Michel Barnier said that sealing a trade pact with Britain was still possible, increasing hope that a deal can be reached despite the fraught negotiations with just days to go before the U.K. leaves the trading bloc.
The Federal Reserve starts its final policy-setting meeting of the year later Tuesday, to conclude on Wednesday. Expectations are growing that the Fed will feel the need to expand its bond buying program as U.S. lawmakers dither over a new fiscal stimulus package.
The Bank of England and the Bank of Japan also close out their 2020 meetings this week.
In corporate news, Credit Suisse (SIX:CSGN) reiterated its key financial target while U.K. warehousing group Segro moved to raise its stake in France’s Sofibus Patrimoine to 100%. On the economic data slate, the U.K. claimant count rose by 64,300, more than expected, but the unemployment rate only climbed to 4.9%, below the 5.1% expected.
Oil prices weakened Tuesday, as the tighter lockdowns in Europe exacerbated worries about a hit to demand even as Covid-19 vaccines began to be rolled out.
With this in mind, traders will look at inventory data from the American Petroleum Institute later Tuesday and the Energy Information Administration on Wednesday for further guidance.
U.S. crude futures traded 0.2% lower at $46.88 a barrel, while the international benchmark Brent contract fell 0.3% to $50.14.
Elsewhere, gold futures rose 0.7% to $1,844.80/oz, while EUR/USD traded 0.1% lower at 1.2149.