European stocks were mixed on Monday despite optimism about the reopening of economies. The pan-European STOXX 600 index rose to a fresh all-time high, with miners leading the gains. On Friday, a report showed that U.S. employers added just 266,000 net payrolls last month, spurring expectations that interest rates would stay lower for longer.
Elsewhere, NIESR estimates the UK GDP will return to pre-pandemic levels by the end of 2022. Meanwhile, Eurozone May Sentix investor confidence arrived at 21.0 versus 15.0 expected, highlighting the optimism surrounding the euro area and global economic recovery going into the second half of this year.
Against this backdrop, the UK FTSE 100 gains 0.06% to 7,134, Italy’s FTSE MIB adds 0.27% to 24,667, France’s CAC 40 is down by 0.24% to 6,370, while the German DAX 30 sheds 0.20% to 15,368. US stock index futures were mixed ahead of the opening bell.
In currencies, the dollar is mixed versus major counterparts on Monday. Following Friday’s rally, EURUSD extends the rally above the 1.2100 figure. The pair climbed to fresh highs around 1.2175, targeting the 1.2200 barrier now on the back of the increasing selling pressure in the greenback after the big miss in April’s payrolls published last Friday. Furthermore, yields of the German 10-year Bund retest multi-day highs. In a wider picture, the common currency stays constructive amid the improved growth outlook in the Eurozone now that the vaccine campaign appears to have gained some serious pace.
Meanwhile, oil prices bounced from Friday’s lows around $68 to exceed the $69 figure earlier in the day. Crude oil prices are in the spotlight after a cyberattack shut down the largest pipeline system in the U.S. on Friday. Colonial Pipeline Co. operates the 5,500-mile Colonial Pipeline system taking fuel from the refineries of the Gulf Coast to the New York metro area. A prolonged shutdown's effect on prices could be significant. Now, Brent crude needs to overcome the $69 handle in order to retarget the $70 barrier in the short term.
Nathan Lambert, Head of Global FX Analytical Department