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Europe Weakens as Coronavirus Victims Top One Million

3 April 2020

European stock markets pushed lower Friday, as investors reacted nervously to the number of global coronavirus cases topping one million while U.S. unemployment soared.

At 4 AM ET (0800 GMT), the U.K.'s FTSE index traded 1% lower, France's CAC 40 was down 0.6%, while the DAX fell 0.4%. The broader based Stoxx 600 Europe index dropped 0.3%, on course to end the week roughly unchanged.

The pandemic has shown few signs of abating Friday, with global cases surpassing one million, and more than 53,000 deaths. The pandemic has spread further in the United States and the death toll climbed in Spain and Italy to 10,000 and 13,000 respectively.

In corporate news, shares in Hennes&Mauritz  (ST:HMb) climbed 6% despite the world's second-biggest clothing retailer reporting a 46% plunge in March sales as the coronavirus forced the closure of most of its shops. 

The Swedish company also said it expected to be able to cut operating expenses by around 20–25% in the second quarter while it slashed its planned capital spending for 2020 to 5 billion kronor ($494 million) from 8.5 billion.

Shares in BAE Systems (LON:BAES) dropped 1% after saying it would defer a decision on whether to pay its dividend after seeing significant disruption from coronavirus in recent weeks.

Additionally, shares in Banco Santander (MC:SAN) dropped 2.5% and BNP Paribas (PA:BNPP) fell 3.3% after they announced that they would be following many of their European peers in cancelling their final dividends for 2019.

This follows the European Central Bank asking banks not to pay dividends until October in order to conserve cash. Authorities are desperate to stop a crisis in the real economy infecting the financial system too.

There’s more U.S. employment data to come at 8:30 AM ET (12:30 GMT), after Thursday’s shocking 6.6 million filing jobless claims, in the form of the official jobs report for March. 

However, the cut-off date for this data is the week of March 12, before any major U.S. state had gone into lockdown. For that reason, economists are expecting a drop in nonfarm payrolls of just 100,000, according to forecasts compiled by .

There are a number of important economic numbers due Friday, aside from the U.S. payrolls release, including services PMI data in the eurozone and ISM non-manufacturing PMI in the U.S. These are set to provide more information about the impact of the business lockdowns in the respective regions.

The oil market will also be in focus after Thursday’s sharp gains on the back of talk that Russia and Saudi Arabia will put their differences aside to organise a cut to global supply.

At 4 AM ET U.S. crude futures traded 0.8% higher at $25.52 a barrel. The international benchmark Brent contract rose 4.9% to $31.41.

Elsewhere, Gold futures fell 0.3% to $1,632.20/oz after a late rally on Thursday, while EUR/USD traded at 1.0790, down 0.6% on the day.



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