European stocks inched mostly higher on Monday, mirroring a cautious optimism among investors globally. 10-year Treasury yields are trending lower after a below 1.60%. The global economic recovery continues to lift investor sentiment, overshadowing worries about a third coronavirus wave.
On the data front, Eurozone February construction output came in at -2.1% vs +0.8% m/m prior. Civil engineering activity fell by 3.2% and building construction fell by 1.3% in February. Eurozone February current account balance arrived at 25.9 billion euros versus 30.5 billion euros prior. Elsewhere, the Bank of England announced a joint creation of the central bank digital currency taskforce with the UK Treasury.
On the pandemic front, Pfizer and BioNTech said in a statement that the EU is exercising an option to secure additional 100 million doses from the pharma giants. In Spain, the Health Ministry announced on Monday that it is considering delaying second doses of coronavirus vaccines developed by Pfizer and Moderna.
In individual stocks, ABN AMRO rose 2.4% before trimming gains to 1.6% after the Dutch bank agreed to pay a fine of 480 million euros to settle a criminal investigation into money laundering by prosecutors in the Netherlands. Danske Bank stock fell 1.5% after the CEO of the Danish bank, Chris Vogelzang, resigned after Dutch authorities named him as a suspect in the ABN Amro probe.
Against this backdrop, the FTSE 100 in London gains just 0.06% to 7,024, Italy’s FTSE MIB sheds 0.23% to 24,686, France’s CAC 40 is up by 0.19% to 6,299, while the German DAX 30 up down by 0.16% to 15,435. US stock index futures are little changed to lower ahead of the opening bell on Wall Street.
In currencies, the selling pressure surrounding the dollar has intensified on Monday as positive risk sentiment prevails while Treasury yields keep retreating from highs. As such, EURUSD jumped to early-March highs in the 1.2030 area in recent trading. The technical picture has improved substantially following a break above the 1.2000 barrier that had been capping gains last week. Now, the pair needs to confirm the breakout on a daily closing basis in order to regain the 100-DMA that now represents the immediate upside barrier around 1.2050.
Nathan Lambert, Head of Global FX Analytical Department