European stocks are likely to open higher on Thursday, even as a cautious undertone may prevail on worries that tougher coronavirus restrictions could threaten the incipient economic recovery.
The United States is scheduled to publish its advance Q3 GDP numbers later today, with investors looking for a stunning rebound in growth following the deepest decline in at least 73 years.
Meanwhile, as recession fears grow, it remains to be seen whether the European Central Bank will ramp up stimulus support during the policy review later today.
Amid concerns over the growth recovery and inflation outlook, many economists expect a dovish message signaling willingness to do more if needed.
Earlier today, the Bank of Japan held its monetary policy steady, but trimmed its growth and price forecasts for the current fiscal year. The central bank made no changes to a package of steps aimed at easing corporate funding strains.
Asian stocks remain mostly lower, with Chinese markets trading flat as investors await the outcome of a big Chinese Communist Party meeting — the fifth plenary session of the 19th Central Committee – that will set the country’s long-term priorities and draft a new “Five-Year Plan.”
The dollar held its overnight advance and oil regained some ground after falling more than 5 percent overnight, while gold hovered near one-month low.
The British pound steadied as media reports indicated some progress on Brexit talks, raising hopes that a deal could be reached by the middle of November.
U.S. stocks slumped overnight amid widespread selling as investors grappled with a record number of Covid-19 cases in the U.S. and abroad accompanied by an increase in hospitalizations and deaths.
Meanwhile, there were fears that a victory by Joe Biden could make Republicans less likely to approve a new relief package until next year.
The Dow Jones Industrial Average lost 3.4 percent to end at its lowest level in nearly three months, while the tech-heavy Nasdaq Composite plummeted 3.7 percent and the S&P 500 plunged 3.5 percent.
European markets endured a brutal wave of selling on Wednesday as some countries restarted coronavirus lockdowns to halt the spread of the virus.
The pan European Stoxx 600 declined 3 percent. The German DAX plunged 4.2 percent, France’s CAC 40 index shed 3.4 percent and the U.K.’s FTSE 100 gave up 2.6 percent.
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