European equities opened mostly higher but the overall trading looked subdued at the start of the week. Investor sentiment was weighed down by Credit Suisse shares, which slumped over 13% following a warning of significant losses from exiting positions after a U.S.-based hedge fund defaulted on margin calls. On the positive side, investors are growing more confident about a strong global economic rebound from the COVID-19 pandemic, led by the United States. Of note, data over the weekend showed annual profits at China’s industrial firms surged in January-February, highlighting a rebound in the country’s manufacturing sector.
Against this backdrop, the FTSE 100 in London sheds 0.26% to 6,723, Italy’s FTSE MIB loses 0.07% to 24,374, France’s CAC 40 is up by 0.16% to 5,998, while the German DAX 30 rises by 0.15% to 14,771. US stock index futures turned negative, signaling correction from record highs after warnings from Credit Suisse and Nomura Holdings.
In currencies, the dollar remains steady around one-year peaks as the safe-haven demand persists. The USD index trades with solid gains around the 93.00 figure despite yields of the key US 10-year Treasuries have lost some upside momentum. Of note, the index has broken the 200-day SMA in recent trading, adding to the upbeat tone surrounding the US currency. EURUSD is now back threatening the 1.1760 area, a break below which would pave the way towards 1.1745, followed by the 1.1700 figure. On the upside, the 1.1800 level continues to act as the immediate target for euro bulls.
Meanwhile, oil prices erased early losses, to turn unchanged for the day after a bounce from the $63 support. Brent crude is now back above the $64 figure, targeting $65. Earlier in the day, the futures slumped after the Ever Given container ship was partially pried free in the Suez Canal. However, despite the latest bounce, downside risks continue to persist in the oil market, especially amid a stronger dollar and fragile investor sentiment in the global markets.
Elsewhere, bitcoin price jumped from $56,200 to just above $57,000 on the news that Visa will allow the use of cryptocurrency USD Coin to settle transactions on its payment network. Visa's acceptance of the stablecoin in general is a positive sign for the rest of the cryptocurrency industry. As a result, BTCUSD exceeded the 20-DMA and could confirm the breakout on a daily closing basis if the prices manage to hold above the $57,000 figure. In this scenario, the digital coin could retarget the $60,000 handle seen earlier this month.
Nathan Lambert, Head of Global FX Analytical Department