European stocks look set to open on a cautious note Wednesday as coronavirus vaccine hopes faded and top U.S. economic officials warned the U.S. economy faces continued risks. Also, analysts expect U.S.-China tensions to intensify as the U.S. presidential elections approach in November.
Virus worries persist as the overall number of global coronavirus cases increased to over 4.8 million, according to the Johns Hopkins University. The death toll surpassed 323,000.
The U.S. accounts for the world’s highest number of cases and deaths at 1,528,568 and 91,921, respectively.
Russia has the second highest number of infections followed by Brazil, the U.K., Spain and Italy. The U.K. accounts for the second highest Covid-19 deaths worldwide at 35,422.
Meanwhile, as some parts of the world slowly get back to normal, the cities of
Jilin and Shulan, both in the province of Jilin in northwestern China, have been sealed off following a worrying spike of Covid-19 infections.
Asian markets are trading mixed as diplomatic tensions between Australia and China escalated and the People’s Bank of China held its benchmark lending rate steady, as widely expected.
The dollar struggled after Federal Reserve Chair Jerome Powell said on Tuesday layoffs by state and local governments will slow the U.S. economic recovery.
Separately, Boston Federal Reserve Bank President Eric Rosengren said the outlook for the economy is sobering and he expects the unemployment rate will peak at close to 20 percent.
Gold held steady while oil prices rose amid signs of improving demand and a drawdown in U.S. crude inventories.
U.S. stocks fell overnight after top U.S. economic officials warned the U.S. economy faces irreparable damage from the coronavirus.
While Fed Chair Jerome Powell called for additional fiscal stimulus, U.S. Treasury Secretary Steven Mnuchin warned the economy risks suffering “permanent damage”.
The Dow Jones Industrial Average tumbled 1.6 percent, the tech-heavy Nasdaq Composite slid half a percent and the S&P 500 lost 1.1 percent.
European markets ended mostly lower on Tuesday after vaccine experts expressed skepticism about the Covid-19 vaccine trial results announced by Moderna Inc.
The pan European Stoxx 600 gave up 0.6 percent. The German DAX edged up 0.2 percent, while France’s CAC 40 index shed 0.9 percent and the U.K.’s FTSE 100 declined 0.8 percent.
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