Austrian lockdown sends energy, travel and restaurants lower

Austrian plans for a 20-day lockdown from Monday has sparked a risk-off move, with energy, travel and restaurant names all losing ground. Early Christmas shopping has helped lift UK retail sales, with improved footfall for in-person stores. 

• Austrian lockdown hits risk assets. 

• Travel and restaurant names head up losses.

• UK retail sales gain ground as consumers buy early for Christmas.  

Record highs for the Nasdaq and S&P 500 helped boost sentiment for Asian markets, but the European open has been less kind to bulls. A sharp move lower for risk assets has seen stocks and energy markets head lower, with gold catching a bid. European stocks on the back foot as Austria announce a full national lockdown starting Monday. With Austrian cases surging over 400% in the last month alone, they do stand out as a particularly bad case when set against many of their European peers. However, with Covid cases turning upwards across the likes of Germany, France, and Portugal, there is a fear that today’s announcement is indicative of where other European nations could find themselves in 2-3 weeks' time. Energy markets have taken a hit off the back of the Austrian lockdown announcement, with the demand outlook undoubtedly worth adjusting if we see a fresh bout of lockdowns. With the potential for impending restrictions on restaurants and travel, it comes as no surprise to see the likes of IAG, Restaurant Group, EasyJet, and Mitchells & Butlers heading up the FTSE laggards.  

UK retail sales data served to highlight the uneven nature of consumer behaviour as we head into a crucial six-week period for retailers. While retail sales rose 0.8% in October, that appears to be primarily driven by early Christmas shopping from non-food stores. While we are seeing some easing of supply chain issues, the message around the potential disruptions over the coming month has clearly hit home for shoppers seeking to avoid getting caught short. Interestingly, October saw a shift away from online shopping in favour of physical stores.  

Ahead of the open we expect the Dow Jones to open 221 points lower, at 35,650.