European Stock Futures Higher as Trump Clears Way for Transition

This post was originally published on this site – European stock markets are seen opening higher Tuesday amid continued enthusiasm over the progress towards a coronavirus vaccine, and as clarity emerges over the transition of power in the U.S.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.5% higher, CAC 40 futures in France climbed 0.7% and the FTSE 100 futures contract in the U.K. rose 0.3%. 

Emily Murphy, the General Services Administration head, on Monday effectively acknowledged Joe Biden as the winner of the presidential election, three weeks after the event, saying he could have briefings and funding to ease his transition into the role.

President Donald Trump tweeted his approval of the move, suggesting he has come to terms with the result, even though he vowed to continue fighting. That followed the decision by the state of Michigan to certify its election results, ending Trump’s last big hope of overturning his defeat at the polls.

Uncertainty over whether there would be an orderly transfer of power in the largest economy in the world had weighed on the markets to a certain extent since the Nov. 3 election.

However, the dominant driver of late has been the progress in the search for a vaccine for the Covid-19 vaccine. On Monday, AstraZeneca (NASDAQ:AZN) announced its candidate had an efficacy of up to 90% in certain doses, the third potential vaccine after similarly positive news from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA).

In Europe, some governments have already started scaling back their recent lockdowns, although Monday’s PMI data pointed to significant economic damage having already been done.

Germany’s third-quarter GDP release rose 8.5% on the quarter, a recovery from the historic 9.7% fall in the previous quarter, but of more interest may be the influential Ifo business climate index for November, due later in the session. This is expected to show a slowdown to 90.1 from 92.7 given the restrictions during the month to combat the second wave of the coronavirus. 

Oil prices continued to post gains Tuesday, with the Brent contract climbing to levels not seen since March, as further positive Covid-19 vaccine news pointed to a reasonably prompt recovery in oil demand. 

Crude oil supply data from the American Petroleum Institute are due later in the day.

U.S. crude futures traded 1.3% higher at $43.62 a barrel, while the international benchmark Brent contract rose 1.1% to $46.55.  Both oil benchmarks settled up about 2% on Monday after gaining about 5% last week.

Elsewhere, gold futures fell 0.6% to $1,826.70/oz, dropping to its lowest level in four months, while EUR/USD traded 0.1% lower at 1.1851.

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