Stocks mostly lower on Monday as the coronavirus numbers continue to worsen over the weekend, fueling investor concerns overt a second wave of the pandemic that could derail the fragile recovery in the global economy, with a surge in infections in the US left several states questioning their reopening plans. In this context, investors will focus on the testimonies of both Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin before the House Financial Services Committee on Tuesday.
By the way, the total number of global COVID-19 cases topped the 10 million mark on Monday, whilst more than 500,000 deaths have been recorded globally. As a result, China’s Shanghai Composite was down 0.54% while Japan’s Nikkei 225 shed 1.60% after the official report pointed to a 12.3% drop in May retail sales year-on-year earlier in the day.
In Europe, stocks opened lower but managed to trim the initial losses and even turned mixed as investors digested the rising coronavirus death toll. In individual stocks, Wirecard filed for insolvency but vowed to continue business activities, fueling a rally in stocks by nearly 200%. The pan-European Stoxx 600 edged 0.2% lower.
As for currencies, the dollar is mixed-to-lower against the majors to start the week. EURUSD hit intraday highs around 1.1270 earlier in the day but retreated partially since then, trimming local gains amid a heightened uncertainty surrounding the coronavirus pandemic. Later in the day, the Eurozone sentiment data could affect short-term dynamics in the pair that needs to hold above 1.12 so that to extend the recovery.
Elsewhere, Brent is under a limited downside pressure, threatening the $40 figure on Monday. Once below this level, more sellers could reemerge and send the futures to last week’s lows around $39.70. However, should risk sentiment improve in the short term, the prices could even turn positive on the day. Still, the bullish potential in the market looks limited, especially against the backdrop of rising crude oil production in the United States.
