Following mixed trading in Asia, European stocks opened lower on Monday as investors express a cautious tone amid rising US Treasury yields, with developments surrounding the pandemic and vaccine rollout remaining in focus.
On the data front, the headline German IFO business climate index jumped to 92.4 in February from 90.3, beating the consensus estimates of 90.5. The current economic assessment arrived at 90.6 points as compared to last month's 89.2 and 88.9 expected. The IFO expectations index climbed to 94.2 in February from 91.5, exceeding market expectations of 91.8.
Against this backdrop, the FTSE 100 in London sheds 1.04% to 6,554, Italy’s FTSE MIB sheds 0.93 percent to 22,920, France’s CAC 40 is down by 0.63% to 5,737, while the German DAX 30 sheds 0.82% to 13,878. US stock index futures are losing ground during the European hours as well. Overnight, the White House said that it expects to ship out millions of delayed coronavirus vaccine doses this week.
In currencies, the dollar gains nearly across the board due to safe-haven demand amid some deterioration in investor sentiment. However, the bullish momentum has eased following more decisive gains seen in Asia. As such, EURUSD managed to erase early losses, to turn flat marginally above the 1.2100 figure after the 20-DMA acted as support during the morning slide. The common currency derived some support from the IFO survey that came in better than expected. On the other hand, the bullish potential for the pair is limited as the greenback will likely stay afloat as long as risk aversion prevails in the global financial markets.
Meanwhile, oil prices stay under pressure since the second half of last week. Sill, Brent crude derives support from the $62 handle, with downside risks being limited in the short term as long as the futures remain above this level. On the positive side, the investment giant Goldman Sachs raised its price forecast for Brent by $10. Now, the bank expects the prices to reach $70 by the second quarter and $75 in the third quarter.
Elsewhere, gold prices are trending higher after a brief dip to mid-2020 lows around $1,760 last Friday. The bullion managed to bounce following a sell-off and was nearing the $1,800 barrier at the time of writing. If the precious metal manages to turn this level into support in the short term, the descending 20-DMA around $1,820 will come back into market focus. However, the market will likely need an extra boost in order to overcome this immediate resistance in the short term.
Nathan Lambert, Head of Global FX Analytical Department