European stock markets are mostly lower on Monday amid lingering pandemic-related concerns. Investors are also worried ahead of the President-elect Joe Biden’s inauguration due on Wednesday and the latest European Central Bank meeting due on Thursday. Over the weekend, the Netherlands saw several thousand people protest against lockdown measures. In the UK, vaccine deployment minister said that everyone will be offered a vaccine by September. In individual stocks, Carrefour shares fell by more than 7% after Canada’s Alimentation Couche-Tard dropped its takeover bid for Europe’s largest retailer. On the positive side, China reported today that its economy 6.5% in the fourth quarter from a year ago, helped by retail sales rising 4.6%.
Against this backdrop, the FTSE 100 in London sheds 0.08% to 6,730, Italy’s FTSE MIB adds 0.03 percent to 22,389, France’s CAC 40 is down by 0.22% to 5,599, while the German DAX 30 rises by 0.06% to 13,788. US stock markets are on holiday today.
In currencies, the dollar retains a bullish bias versus most rivals on Monday amid the persisting safe-haven demand. As such, EURUSD dipped to five-week lows around 1.2060 in recent trading while staying on the defensive after a break below the 20-DMA witnessed last week. later in the week, the selling pressure surrounding the common currency could intensify if the ECB delivers a dovish tone during the upcoming meeting. If the pair’s decline continues in the short term, the pair could threaten the 1.2000 psychological figure.
USDJPY struggles to see a more robust upside momentum but manages to stay above the 20-DMA these days. The pair now needs to overcome the 104.00 resistance in order to stage a stronger rebound, with the current dynamics looking neutral as long as the prices stay above the mentioned moving average, today at 103.55. a daily close above would be a confirmation of another breakout on the way toward the 100-DMA around 104.60.
In commodities, oil prices remain on the defensive after last week’s rejection from one-year highs registered around $57.40 last week. Brent crude encountered support from the $54.50 area earlier in the day and turned marginally positive. Still, the recovery momentum looks limited as the safe-haven dollar remains on the offensive, with risk aversion persisting across the financial markets. Investor concerns over vaccines adding to the downbeat tone in the oil market as well.
Nathan Lambert, Head of Global FX Analytical Department