European stocks push lower; German economy manifests further weakness
Early Tuesday saw European stocks push lower, resulting from signs of a weakening German economy, the region’s industrial powerhouse.
The DAX in Germany traded 0.9% lower at 3:55 AM ET (0705 GMT). Also experiencing the plunge are France’s CAC 40 which fell by 0.7% and the U.K.’s FTSE index by 0.7%.
In April, German exports have plummetted at a record pace by 31.1% with reference to the year earlier. Analysts had noted that it had fallen the most since the financial crisis of 2008.
Relying largely on trade, the German economy had seen orders being depressed of late especially with the market movement being at the mercy of the pandemic’s unpredicatbility.
On Monday, European Central Bank President, Christine Legarde was compelled to defend the stimulus measures the region’s banks had resorted to in attempts to vanquish further threats by the coronavirus pandemic in a hearing in the European Parliament.
This reels from the decision made by Germany’s Constitutional Court to give the ECB three months to either justify the huge government bonds purchases or let the German Bundesbank as the main buyer in its key debt-buying scheme go altogether.
Meanwhile, the BP (LON:BP) dropped 1.1% after announcing plans of cutting 10,000 jobs due to a slump in demand for crude internationally.
The oil titan had rendered redundancies inert amid the pandemic’s peak. However, on Monday, the company had disclosed to its staff that around 15% will have to depart by the end of the year.
Downgrading its revenue growth expectations for a full year, British American Tobaccco reported a drop of 2.3% after. This is despite its preliminary assertions that it had been faring well in the first half of the year while being caught in the COVID-19 outbreak.
On Tuesday, oil prices had sold off, thus continuing Monday’s strong selloff in what appears to be a correction post its latest impressive gains.
From lows back in April, crude had risen strongly: WTI had jumped to 300% and Brent, by 170%. These records are a combination of record oil production cuts commenced by the OPEC, including Russia. There are also signs pf demend increase as the global economy re-emerged from lockdown.
U.S. Crude Futures traded 1.1% at 3:55 AM ET, lower at $37.77 per barrel. Brent, the ineternational benchmark contract fell by 0.8% to $40.47.
In the commodities scene, Gold Futures climbed by 0.2% bringing it to $1,708.78/oz while EUR/USD is down by 0.2%, as it is being traded at 1.1266.