Investing.com – European stock markets are set to open lower Friday, with investors looking for more fiscal stimulus amid worries the global economic recovery might fade as coronavirus cases increase.
Finance ministers from the euro area met virtually Thursday, resulting in Ireland’s Finance Minister Paschal Donohoe being elected as the Eurogroup’s new chair. However, there has been disappointment that little fresh emerged about the proposed 750 billion euro recovery fund for economies hit hardest by Covid-19.
The markets will now have to wait for the get together of the European Union leaders, on July 17-18, for any further news about the fund, potentially a groundbreaking program funded by joint debt.
There remain fundamental disagreements over key aspects, meaning the plan could still be watered down or fail.
The European Central Bank is also scheduled to meet next week, but little new is expected after the June meeting increased the size of its Pandemic Emergency Purchase Program.
“They have deserved it. After all the excitement since March, next week’s meeting should give the ECB some time to reflect and take stock. It will not be the moment to decide on any new action,” said analysts at ING, in a research note.
Meanwhile, worries are mounting that the resurgence in coronavirus cases, particularly in the U.S., could derail an economic recovery.
There were more than 60,500 new Covid-19 infections reported across the United States on Thursday, the second straight day that new cases have topped 60,000..
Earlier this week the European Commission stressed the euro-zone economy is still on course for its biggest contraction ever, down 8.7% this year – a forecast predicated on the assumption there wasn’t a second wave of infections causing more lockdowns.
Oil prices weakened Friday, heading for a weekly decline after the steep losses seen during the previous session, amid worries the nascent economic recovery in the U.S., and elsewhere, is being quashed as Covid-19 infections rise and cities shut back down.
Oil inventories also remain bloated, with the U.S. crude oil stocks rising by nearly 6 million barrels last week.
At 2:10 AM ET, U.S. crude futures traded 1.6% lower at $39 a barrel, on track for a weekly loss of around 3%. The international benchmark Brent contract fell 1.3% to $41.81, set to drop around 2%.