European stocks opened nearly unchanged before turning mixed in subdued trading due to holidays in the UK and the US. Investors continue to digest inflation data out of the United States. The data on Friday showed that the core PCE Price Index came in at 3.1% versus 2.9% expected. As a reminder, this is the Fed's preferred inflation gauge that arrived considerably above the central bank's nominal 2% target. In Spain, consumer prices rose 2.4% in May year-on-year according to flash data, the highest inflation reading in four years. In China, official manufacturing PMI for May came in at 51.0 versus the previous month’s reading of 51.1.
Elsewhere, the U.S. Federal Reserve said it was concerned about the Deutsche Bank’s anti-money laundering practices. As a result, the German lender’s stocks fell 1.77%. The OECD published its latest Economic Outlook on Monday. The organization sees a 5.8% growth in gross domestic product in 2021, compared to a 3.5% contraction in 2020.
Against this backdrop, the UK FTSE 100 gains 0.04% to 7,022, Italy’s FTSE MIB adds 0.82% to 25,260, France’s CAC 40 is down by 0.16% to 6,473, while the German DAX 30 declines by 0.38% to 15,460. US stock markets are closed for Memorial Day weekend.
In currencies, the dollar treads water in tight trading ranges at the start of the week as global markets remain in a consolidative mood on Monday. EURUSD has settled just below the 1.2200 figure following a bounce from the 20-DMA seen on Friday. The pair looks indecisive after finishing last week unchanged. In the short term, the common currency needs to hold above the mentioned moving average that now arrives around 1.2150. On the upside, a decisive recovery above the 1.2200 hurdle would pave the way towards 1.2230.
In other markets, gold prices look steady around $1,900 on Monday, slightly off January highs seen around $1,912 last week. The precious metal keeps climbing higher, having posted the fourth consecutive week in a row on Friday. The bullion derives support from dollar weakness and its status as a store of value amid increasing inflation expectations. The bullion was last seen trading around the $1,904-05 region, nearly unchanged for the day.
Nathan Lambert, Head of Global FX Analytical Department