European stocks climbed higher at the open on Monday, with investors continuing to express optimism over the economic recovery in anticipation of additional stimulus measures in the US. The rollout of vaccines also is providing optimism among market players at the start of a new trading week.
On the data front, Eurozone February Sentix investor confidence arrived at -0.2 versus 2.0 expected as lockdown measures weighed on sentiment. Furthermore, the current situation index fell from -26.5 in January to -27.5 while the expectations index declined from an all-time high of 33.5 in January to 31.5. still, the dismal report failed to overshadow a broader optimism among investors, with equities extending gains during the session.
Against this backdrop, the FTSE 100 in London adds 0.71% to 6,535, Italy’s FTSE MIB recovers by 1.17 percent to 23,354, France’s CAC 40 is up by 0.66% to 5,696, while the German DAX 30 rises by 0.29% to 14,064. US stock index futures extend the ascent following the best weekly gains since November.
In currencies, the dollar looks steady following a deep sell-off seen on Friday as a disappointing US employment report dented the appeal of the US currency. as such, EURUSD regained the 1.2000 handle but struggles to see a more robust recovery on Monday even as risk sentiment remains upbeat. In part, this is due to weak economic data out of the Eurozone. Considering that the common currency failed to extend its bounce, another decline could be expected. So, the significant 100-DMA remains in market focus for the time being, representing the key support.
Meanwhile, Brent crude has exceeded the $60 handle for the first time since last January. The futures rose to the $60.25 region earlier in the day before paring gains. The oil market continues to derive support from the overall optimism surrounding vaccination, economic recovery, and stimulus measures. On the negative side, Baker Hughes data showed on Friday that U.S. oil rigs rose four to 299 last week, their highest since May. In the short term, the futures could proceed to a bearish correction from more than one-year highs amid overbought conditions.
Nathan Lambert, Head of Global FX Analytical Department