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Riku Tanaka
April 8 20:23

Europe Stocks Get Weaker as Disputes Over Stimulus Funding Remain

"There is reason to be cautious"
European stocks exchanges are set to open lower, for the most part, on Wednesday (Apr 8), as shares are consolidated following the market’s gains this week, as governments’ divisions over how to pay for the region’s reaction to the coronavirus emergency continues.

At 2:15 AM ET (0615 GMT), France's CAC 40 futures and the FTSE 100 futures contract in the U.K. both fell 2.0%, while the DAX futures contract in Germany outperformed, gaining 0.1%.
"There is reason to be cautious as this looked to be a relief rally ahead of next week's start of Q1 earning season and before data reveals the depth of the virus impact," said analysts at JPMorgan, in a research note.
"Data shows the recent move higher has been accompanied by short covering and de-risking rather than active risk taking on the long side."
A video chat between Eurozone finance officials, which began on Tuesday (Apr 8), was set to proceed through to Wednesday (Apr 9) morning in the midst of contrasting opinions over how to handle the financial aftermath of the pandemic. The subsequent press conference was tentatively booked for 4 AM ET (0800 GMT).
The EU nations that were most affected by the contagion, such as Italy, Spain and France, wish to share out the obligations that are brought about after fighting COVID-19 as "coronabonds," which is mutualized debt that all EU countries would help pay off. But this approach has run into heavy resistance from some of the wealthier nations, which believe that they will be stuck picking up other nations' tabs.
As of Wednesday (Apr 8), Italy remains the focal point of the emergency in Europe, with the largest number of fatalities from the pandemic, totaling over 17,000 people; Spain is not too far behind, with more than 14,000 fatalities, as per Johns Hopkins University data.
In corporate news, the Swiss perfume company Givaudan, will be of interest after the firm reported a spike in sales Q1 on Wednesday (Apr 8) and strong growth over the entirety of its areas.
Thales is the most recent large European company to slice its dividend, suspend profit guidance and top up liquidity in light of the global coronavirus crisis. The French aerospace and defense provider said that it had pulled back the proposed final installment of its 2019 profit, saving 430 million euros (US$465 million). UK insurance company Aviva did the same.
Although there isn’t much European information due to be released on Wednesday (Apr 8), however the minutes of the meeting will be of interest, at which the Federal Reserve cut interest rates back to zero, widened access to dollars for overseas national banks, and restarted the massive asset purchases. The minutes are expected to be released at 14:00 ET (1800 GMT).
Oil prices have been jumping unpredictably recently, and pushed higher during European hours subsequent to dropping sharply overnight as traders were kept in limbo on the off-chance that production cuts would be announced.
Prior to the meeting, the EIA will release its weekly US oil inventory numbers at 10:30 AM ET (14:30 GMT), with analysts predicting a rise of about 9.3 million barrels for the week that finished April 3.
In its evaluation of weekly crude inventory, the American Petroleum Institute detailed a rise of 11.9 million barrels on Tuesday (Apr 7).
At 2:15 AM ET, US crude futures exchanged 4.6% higher at US$24.70 a barrel. The global benchmark Brent contract rose 1.6% to US$32.39.
Meanwhile, gold futures fell 0.1% to US$1,683.10/oz, while EUR/USD exchanged at 1.0846, down 0.4% on the day.