Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
European stock markets are sliding towards their lowest levels since the spring, as the second wave of Covid-19 infections force governments to impose tough restrictions again.
Europe’s Stoxx 600 index of leading European companies hit its lowest closing point since mid-June last night. It is set for further losses today as Berlin and Paris consider new lockdown measures, which could include a new national lockdown in France.
In London, the FTSE 100 is expected to fall over 1%, towards levels seen in April when trading resumes this morning, as anxiety over a new economic downturn hits stocks.
Both France and Germany have seen sharply rising Covid-19 cases, raising fears that their health systems could be overwhelmed if deaths keep rising in the next few weeks.
President Emmanuel Macron is scheduled to give a televised address on Wednesday evening amid reports that his government was considering placing the country under a month-long lockdown, after France reported its highest death toll since April.
Chancellor Angela Merkel is pushing Germany’s state premiers to agree the closure of all bars and restaurants from next week, in an attempt to slow the pandemic while keeping schools open.
[A draft resolution…] said an exponential increase in infections in almost all regions of Germany meant that many local health authorities could not track and trace all infections so it was necessary to significantly reduce contact between people now in the hope that extensive restrictions are not required over Christmas.
If the leaders of Germany’s 16 states agree to the draft during a telephone conference later on Wednesday, fitness studios, discos and cinemas will close along with theatres, opera houses and concert venues.
Shops would be allowed to remain open if they implement hygiene measures and limit customer numbers, while restaurants would only be allowed to offer takeaways.
A second wave of Covid-19 lockdowns could push the eurozone economy back towards recession, and give the whole global economy a shunt.
Jeffrey Halley, senior market analyst at OANDA, says a new French lockdown would be “very bad news for the European recovery”, and for the EU’s second-largest economy.
The Euro will almost certainly come under more pressure, already on the back foot as investors reduce pre-US-election risk. The chill winds would be felt in European equities as well. The fall-out is unlikely to be confined to just Europe.
The pandemic continues to rage beyond Europe too, with the US reporting almost half a million new cases in a week. China has reported 42 new cases – its biggest daily total in two months.
The latest US trade figures, and oil inventory count, will show how the world’s largest economy is performing – with the US presidential election race in its final week.
- 7.45am GMT: French consumer confidence for October
- 9.30am GMT: Office for National Statistics report on the health, social and economic impact of COVID-19
- 12.30pm GMT: US trade balance for September
- 2.30pm GMT: IEA weekly oil inventory figures