European stocks are likely to open on a tepid note Wednesday on concerns that rising numbers of Covid-19 infections and U.S. President Joe Biden’s potential tax hikes will delay progress toward economic recovery.
The overall number of global Covid-19 cases has surpassed 124 million, while the deaths have surged to more than 2.73 million, according to the Johns Hopkins University.
The United States is the worst-hit country in terms of cumulative caseload, followed by Brazil and India. Brazil registered 3,251 additional coronavirus-deaths on Tuesday, marking a new record.
Meanwhile, the Biden administration is exploring tax increases on businesses, investors and wealthy Americans to fund its upcoming $3 trillion infrastructure and jobs spending proposals, the Washington reported, citing people familiar with the matter.
The details of two massive spending proposals were first reported by the New York Times on Monday.
Asian markets fell broadly in cautious trade as renewed lockdowns in Europe clouded the outlook for a swifter economic recovery.
The head of the World Health Organization said recent increases in deaths and cases represent “truly worrying trends.”
U.S. bond yields headed for a third day of declines and held close to one-week low after Federal Reserve Chairman Jerome Powell played down inflation risks.
Gold held firm despite dollar strength while oil held stable below $60 a barrel.
Consumer and producer price data from the U.K. and flash Purchasing Managers’ survey results from the euro area are due later in the session, headlining a busy day for the European economic news.
Across the Atlantic, a report on durable goods may attract some attention along with Powell and Yellen’s second day of Congressional testimony.
The U.S. Treasury will sell $61 billion in five-year notes today and $62 billion in seven-year notes on Thursday.
U.S. stocks ended lower overnight as both Treasury Secretary Janet Yellen and Fed Chair Jerome Powell sounded optimistic about growth but emphasized that the U.S. recovery from the pandemic is far from complete.
The Dow gave up 0.9 percent, the S&P 500 lost 0.8 percent and the tech-heavy Nasdaq Composite tumbled 1.1 percent.
European markets ended mixed on Tuesday as investors reacted to rising Covid-19 cases in the region and recent extensions to lockdowns in Germany, France and Italy. Concerns over rising tensions between the EU and China weighed as well.
The pan European Stoxx 600 eased 0.2 percent. France’s CAC 40 index and the U.K.’s FTSE 100 shed around 0.4 percent while the German DAX edged up marginally.
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