European markets suffer as elevated COVID cases hurt growth prospects

The lack of a major reversal in European Covid cases is hurting sentiment, with stocks drifting lower at the open. Brexit talks look set to continue, yet we have seen precious few signs of a potential breakthrough.  

  • European markets head lower, as Covid cases continue to hurt sentiment.

  • Political risk fades as Trump admits he would concede.

  • Brexit talks continue, yet key hurdles remain. 

European markets are heading lower despite a relatively bullish overnight session in Asia, with fears over elevated Covid cases undermining some of the recent vaccine optimism. German cases have topped one-million mark, with daily deaths up to a record 426; highlighting the ongoing difficulties in bringing the virus under control. Despite optimism over the future growth trajectory, there is no getting around the fact that a more drawn-out period of lockdowns will weigh heavily on European growth. Political risk out of the US is all but gone after Donald Trump admitted he would concede if the electoral vote is confirmed in favour of Joe Biden. There is little hope of the president reversing a comprehensive victory from Biden, and the prospect of a peaceful handover alleviates some of the underlying risk for markets.  

Michel Barnier is heading to London in a bid to help break the deadlock in Brexit talks today, with just five-weeks to overcome a seemingly insurmountable fish-shaped wall in negotiations. Unfortunately, the evident desire to reach a deal from both sides has not been matched by a willingness to compromise, and thus there is little to indicate we will overcome the final hurdles. The issues of fishing right, state aid, and future dispute resolution remain a trio of hurdles which remain the three major sticking points which could ultimately lead the UK out of the EU without a deal. Nevertheless, with the pound having gained ground against the euro over recent months, it is clear that traders either expect a last-minute breakthrough or have simply taken on a more relaxed stance to what originally touted as the worst-case scenario in 2016. 

Ahead of the open we expect the Dow Jones to open 52 points higher, at 29,924.  

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

AUD/USD: Risk-on mood, upbeat second-tier Aussie data back bulls attacking 0.7700

AUD/USD takes the bids to refresh intraday high after Monday’s downbeat performance. The aussie pair recently benefited from upbeat data at home and risk-on mood as Tokyo opens. Incoming Treasury Secretary Janet Yellen’s indirect support to Biden’s stimulus favor the risk-takers.


EUR/USD:Falling wedge on 4H tests bearish impulse below 1.2100

EUR/USD portrays choppy trading moves between 1.2075 and 1.2080 during Tuesday’s Asian session. Bullish chart pattern, recovering MACD keep buyers hopeful. Early February lows, 61.8% Fibonacci retracement add to the downside filters.


Gold: All eyes on the greenback and US yields

Gold prices are attempting to recover as te DXY stalls in its bullish correction. The dollar could still be a catalyst for a deeper positioning squeeze in the yellow metal. The US dollar strengthened for a third consecutive day on Monday.

Gold news

Stellar awaits a massive breakout but remains inside a no-trade zone

XLM has continued to trade sideways since we last reported about it. The digital asset remains locked inside a tightening range which will eventually burst. 

Read more

US Dollar Index: Immediately to the upside comes 91.00

DXY extends the march north and already trades at shouting distance from the 91.00 barrier, or new 2021 highs.

US Dollar Index News

Forex Majors