European equities edged lower on Thursday as the uncertainty surrounding the US fiscal stimulus package persists as negotiations in Congress have stalled, with investors now awaiting the latest weekly U.S. jobless claims numbers due later today. Also, market participants are getting nervous as the US-China trade negotiations loom. According to the latest reports, China’s Assistant Commerce Minister said that he hopes the US to create conditions for the implementation of phase one trade deal.
In individual stocks, Planemaker Airbus fell over 1% after Trump decided to keep in place a 15% tariff on its aircraft despite European Union actions to comply with World Trade Organization rulings. In turn, a European Commission spokesperson said the European Union wants to negotiate a solution with the US on aircraft subsidy row. As the International Energy Agency said the Covid-19 pandemic has cast a long shadow over oil demand, BP Plc and Royal Dutch Shell shed 1.7% and 2.2%, respectively. Tui shares fell over 5% after the travel operator reported a 1.4 billion-euro loss in the third quarter.
Against this backdrop, the UK’s FTSE 100 sheds 0.86 percent to 6,226. Italy’s FTSE MIB edges lower by just 0.03 percent to 20,432, France’s CAC 40 losses 0.19 percent to 5,063, while German DAX 30 sheds 0.22 percent to 13,030. U.S. stock index futures are largely flat, wobbling ahead of the US jobless claims data.
In currencies, the dollar is broadly lower on Thursday, struggling to regain the upside bias. As such, EURUSD managed to shrug off the tariff theme and climbed above 1.18. The pair was flirting with the 1.1850 area at the time of writing. If successful, the next target for bulls will arrive at 1.19. However, it looks like the upside potential surrounding the common currency is limited at this stage, with risk aversion prevailing, suggesting the pair could even resume the decline, especially if the US labor market figures surprise to the upside.
In commodities, Brent crude has settled above $45, trading little changed on Thursday after a local rebound seen yesterday. In its latest oil market monthly report, the International Energy Agency revised down its 2020 global oil demand forecast, citing the deteriorating air travel outlook amid coronavirus crisis. Meanwhile, Russian Energy Minister Alexander Novak, said he doesn’t expect any hasty decisions on output cuts when the OPEC and its allies meet next week. In other words, traders shouldn’t expect any supportive measures from the alliance in the near future, especially as prices have stabilized above the $40 handle following a record plunge in April.
Nathan Lambert, Head of Global FX Analytical Department