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AND DON'T FORGET THE VIRUS (0802 GMT)
Investors face a conjunction of headwinds this morning in Europe.
Fiery exchanges between Chinese and U.S. diplomats have hit Chinese blue chips .CSI300, while the Bank of Japan's move to tweak its ultra-easy policy sent the Nikkei benchmark lower and government bond yields higher.
Treasury 10-year borrowing costs, set for a seventh straight week of increase, had already hit parts of the U.S. stock markets. The rate-sensitive Nasdaq skidded 3% after 10-year yields surged to early-2020 highs at 1.754% US10TY=TWEB.
The yield has since slipped off those levels but it hasn't brought much relief to markets.
Investors must adjust now not just to the risk of higher inflation and higher yields but also to worsening news on the pandemic front, despite the European drug regulator backing the AstraZeneca AZN.L COVID-19 vaccine as safe.
French regions badly hit by the COVID-19 epidemic, including the Ile-de-France region around Paris, are starting a new four-week lockdown while supply delays may force Britain to slow its COVID-19 vaccine rollout.
In India, coronavirus infections at a more than a three-month high have forced the state of Maharashtra to adopt fresh curbs to restrain the spread of the disease.
With fears creeping back on the global recovery, oil prices fell for a sixth day in a row, down nearly 9% during a week which also saw the dollar index making gains and pressuring assets traded in the U.S. currency.
Key developments that should provide more direction to markets on Friday: - Natwest to buy back $1.5 billion of shares from UK government (Full Story) - Greensill creditors make $1.4 bln claims to Australia parent - United Kingdom - Reopening of 1-month, 3-month and 6-month government debt auctions. - Sweden - Reopening of 4-year government debt auction. - Japan's core consumer prices fell 0.4% in February, remaining distant from the BOJ's goal.
(Julien Ponthus)
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PRESSURE PILES ON AHEAD OF THE EUROPEAN OPEN (0637 GMT)
European bourses will be under pressure at the open with futures currently losing between 0.8% and 1% after France announced a new round of regional lockdowns to tackle a wave of COVID-19 infections.
There's no sign of a quick rebound on Wall street after the Nasdaq's 3% fall last night as yields on U.S. 10-year notes are set for a seventh straight week of increases.
Meanwhile Asian stock markets are ending their session deep in the red.
Spooked by Sino-U.S. diplomatic tensions, Chinese blue chips
dropped 3% while in Japan, the decision of the central bank to tweak its stimulus was badly received and dragged the Nikkei down 1.4%.
Oil prices are also showing no inclination to recover with Brent crude futures down over 1% after having plunged 7% overnight.
(Julien Ponthus)
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