European stocks are mostly higher on Monday after the U.S. economic relief package passed the Senate over the weekend. The bill provides direct payments of up to $1,400 for most Americans and extended emergency unemployment benefits. The Democrat-controlled House will pass the bill later this week.
On the data front, Eurozone March Sentix investor confidence arrived at 5.0 versus 1.4 expected. The sentiment indicator jumped to its highest level in over a year amid vaccine optimism and a better economic outlook. In the report, Sentix noted that global vaccination campaigns are making good progress, raising hopes of effective protection. Regional indexes were also helped by gains from the oil majors as crude prices rallied. Earlier in the day, the data showed that China’s exports surged in the first two months of the year, up over 60% in dollar terms.
Against this backdrop, the FTSE 100 in London sheds 0.22% to 6,615, Italy’s FTSE MIB gains 1.22 percent to 23,245, France’s CAC 40 is up by 0.53% to 5813, while the German DAX 30 is 0.88% higher, at 14,043. US stock index futures dipped on Monday in a sign that investor sentiment could deteriorate later in the day.
In currencies, the greenback extends its ascent as traders prefer to buy the safe-haven currency amid surging bond yields. EURUSD has been extending its fall below the 1.1900 handle, to register four-month lows around 1.1865 during the European hours after the Senate approved a modified version of President Joe Biden's coronavirus relief package. Now, the bill returns to the House, which is set to approve it tomorrow. Sellers continue in total control of the sentiment around the single currency after the recent breakdown of the key barrier at 1.19 the figure. Adding to the negative tone surrounding the euro, the German industrial production unexpectedly contracted 2.5% from a month earlier during January.
In commodities, oil prices rallied to the highest levels since May 2019 amid the news that Houthi rebeles in Yemen fired missiles targeting the Saudi Arabian oil industry on Sunday, including Saudi Aramco’s facility at Ras Tanura, which is capable of exporting roughly 6.5 million barrels a day. Brent crude jumped to the $71.40 area before reversing intraday gains amid profit-taking. As a result, the futures retreated to the $69 figure and was last seen marginally above this level. The rising dollar added to the corrective tone in the market.
Nathan Lambert, Head of Global FX Analytical Department