European stocks slipped on Monday, as mixed-to-lower Chinese data and a resurgence of COVID-19 cases in some Asian countries weighed on investor sentiment. China's factories slowed their output growth in April and retail sales significantly missed expectations. Also, global investors continued to express concerns over a rise in inflation and an increase in coronavirus cases, particularly in India. On the positive side, the British economy reopened on Monday. U.K. Prime Minister Boris Johnson has called for a cautious approach to the unlocking, however.
Against this backdrop, the UK FTSE 100 sheds 0.50% to 7,008, Italy’s FTSE MIB adds just 0.03% to 24,774, France’s CAC 40 is down by 0.28% to 6,367, while the German DAX 30 declines by 0.15% to 15,394. US stock index futures point to a negative open. Now, market focus is gradually shifting to the Fed’s minutes from its last meeting, which will be released Wednesday.
In currencies, the euro keeps trading around the 1.2150 intermediate barrier on Monday following a rally seen ahead of the weekend due to broad-based weakness surrounding the greenback. Today, the dollar looks relatively steady as risk sentiment has deteriorated somehow. The USD index itself struggles for direction around 90.30 on Monday as US 10-year Treasury yields have retreated from fresh peaks seen last week. In a wider perspective, the euro remains buoyed as long as the prices stay above the 20-week simple moving average that arrives at 1.2037 today.
Meanwhile, gold prices rallied to early-February highs, extending gains for the third day in a row on Monday. The precious metal climbed to the $1,855 area while breaking above the 200-DMA in process. The uptick was due to a combination of factors including the struggling dollar and the prevailing risk-off sentiment. However, slightly overbought conditions on intraday charts held bulls from placing more aggressive bets. Late last week, the bullion rallied as disappointing US retail sales figures reinforced market expectations that the Fed will keep interest rates low for a longer period.
Nathan Lambert, Head of Global FX Analytical Department