The spread of the coronavirus in many countries should weigh on the markets 
 
 
 
 
Eurostoxx 50 3,482.17 points +0.39% 
CAC 40 5,511.45 points +0.52% 
DAX 30 13,201.89 points +0.52% 
FTSE 100 6,385.24 points +0.31% 
SMI 10,563.89 points -0.01% 
AEX 600.88 points -0.01% 
BEL 20 3,614.96 points +0.63% 
IBEX 35 7,981.50 points +0.59% 
 
DJIA 29,438.42 points -1.16% 
Nasdaq 11,801.60 points -0.82% 
S&P 500 3,567.79 points -1.16% 
 
Nikkei 225 25,634.34 points -0.36% (closing price) 
 
Exchange rate at 06:50 
Change from the close in New York 
 
EUR/USD 1.1849 -0.06% 
EUR/JPY 122.97 -0.07% 
USD/JPY 103.79 -0.01% 
 

TO FOLLOW IN FRANCE

Bouygues and CNP Assurances present their results for the first nine months of 2020 on Thursday, while Soitec publishes its annual accounts.

In a context of tensions within the European Union on the recovery fund intended to support the economies hit by the coronavirus pandemic, investors will follow the auction of assimilable bonds of the Treasury (OAT) and OAT indexed on inflation in France (OATi) and in the euro zone (OATei). Agence France Trésor (AFT) intends to issue between 8.5 billion and 10 billion euros of securities on this occasion.

SHARES

European equity markets are expected to start lower on Thursday as rising Covid-19 cases in many countries force governments to impose restrictions to combat the spread of the virus.

At 7:35 a.m., the CAC 40 futures contract lost 34 points, or 0.6%, according to data from broker IG Markets. The contract on the DAX 30 yielded 92 points, or 0.7%, and that on the FTSE 100 fell back by 55 points, or 0.9%.

For the past month, investors have had to weigh the progress made in the search for a vaccine against Covid-19 and the record number of new cases of Covid-19 announced in many countries, from Europe to Japan by way of by the United States. Stocks have been rising for much of this period, although some sessions have seen strong selling moves.

“The situation has been quite trying for investors,” said Lindsey Bell, head of investment strategy at Ally Invest. While she believes an effective vaccine will allow economic growth to rebound next year, she also expects markets to remain volatile for the foreseeable future. "A lot of concerns and question marks remain in the short term," she said.

New York City announced the closure of its public schools starting Thursday in an effort to stem the spread of the virus. Other cities in the United States have also taken new restrictive measures, limiting the hours of activity of restaurants and shops and recommending that the population reduce their trips as the holiday season approaches. The number of deaths linked to Covid-19 now exceeds 250,000 in the United States.

In this context, Wall Street ended lower on Wednesday. The Dow Jones index (DJIA) lost 1.2% to 29,438 points. The broader S&P 500 index also fell 1.2% to 3,567 points. The tech-heavy Nasdaq Composite fell 0.8%.

In Asia, the indexes are mostly in the red on Thursday, while Japan was placed on "high alert" due to a record number of cases of coronavirus infection. The Nikkei index closed down 0.4% at 25,634.34 points. The Hang Seng lost 0.5% at the end of the session in Hong Kong, while the Shanghai Composite index gained 0.2%.

In addition to the virus, investors' attention on Thursday will be on the monetary policy decision of the central bank of Turkey and on the intervention of the President of the European Central Bank (ECB), Christine Lagarde, before the Economic Affairs Committee. and monetary instruments of the European Parliament.

OBLIGATIONS

Yields on US Treasury bonds fell on Thursday morning, on speculation that the Federal Reserve (Fed) was adopting new support measures, intended to mitigate the economic consequences of the coronavirus pandemic.

The yield on the ten-year benchmark bond stood at 0.858% on Thursday morning, after closing at 0.880% on Wednesday.

CHANGES

The euro fell slightly against the dollar on Thursday morning.

According to Danske Bank, the euro/dollar pair should move little until investors have more clarity on Brexit and the future majority in the US Senate.

Traders could 'take the euro up a notch' if the UK and EU reach a trade deal by the end of the year, if Democrats take control of the US Senate United after Georgia's run-off election and whether news on a coronavirus vaccine remains favourable, says strategist Lars Sparreso Merklin.

“But all of these events have to be in sync for that to happen,” he adds. Until then, the euro will remain in a narrow range against the dollar, as market optimism is "as alive" as pessimism, he said.

For its part, Commerzbank believes that the current impasse over the budget and the recovery fund of the European Union is not a reason to sell the euro. The market "seems relaxed" about Hungary and Poland blocking the adoption of the EU financial package, and it has "right to be," said Commerzbank currency analyst Antje Praefcke.

“It is difficult to imagine that the opposition of Poland and Hungary will last in the long term, since they will benefit massively from EU funds,” she underlines. It is also likely that the EU will accept a compromise on the rule of law in December, so that Budapest and Warsaw agree to the plan, adds Antje Praefcke.

Commerzbank currency analyst You-Na Park-Heger says the euro is undervalued against the dollar, but is expected to appreciate next year as the Federal Reserve is unlikely to raise interest rates in a near future.

OIL

Oil prices lost ground Thursday morning, penalized by concerns about the coronavirus pandemic. "Covid-19 has struck again, with schools closing in New York City," said Stephen Innes, head of market strategy at Axi.

Operators also continue to monitor the Organization of the Petroleum Exporting Countries and its allies (OPEC+). At a meeting on Tuesday, the committee did not recommend cutting production ahead of the OPEC conference on Nov. 30 and the OPEC+ interministerial meeting on Dec. 1.

"The postponement of production guidelines did not surprise anyone" and we will know more at the end of the month, said Tariq Zahir, managing member of Tyche Capital Advisors.

As of 7:25 a.m., the January contract for Brent North Sea crude was down 25 cents to $44.09 a barrel, while the December contract for Nymex-listed light sweet crude (WTI) fell 37 cents to $41. $45 a barrel.