Asian stocks rallied on Monday, with Shanghai Composite rising by 5.7%, leading the gains in the regional markets. Investor sentiment was driven by hopes of policy support and improvement in economies against the rapidly spreading global Covid-19 cases. The World Health Organization said Saturday that more than 200,000 coronavirus cases were confirmed over a 24-hour period. Overall, the MSCI Asia ex-Japan index jumped 1.75%.
In Europe, markets advanced at the start of the week as investors focused on the prospect of economic recovery and progress on potential coronavirus drugs. Last Friday, the European Commission said that conditional approval had been granted for Gilead’s antiviral drug remdesivir to be used in the EU. On the data front, Eurozone May retail sales jumped 17.8% versus +15.0% m/m expected while Eurozone July Sentix investor confidence arrived at 18.2 versus -10.4 expected. In Germany, June construction PMI rose to 41.3 versus 40.1 prior.
Meanwhile, the dollar is lower against the European counterparts but rises versus the safe-haven Japanese yen amid positive risk-on sentiment. However, following a jump to 1.13, the common currency shows some signs of an easing upside pressure as the psychological barrier continues to act as resistance. A decisive break above this level is necessary for a bullish extension. Otherwise, profit-taking could bring the pair back below 1.1250 in the short term.
Elsewhere, oil prices continue to trend higher along with other high-yielding assets, being supported by hopes of a recovery in global energy demand amid the improving economic data out of major economies. Brent has exceeded the $43 handle but struggled to break above the $43.70 local resistance and trimmed intraday gains, suggesting further upside potential could be limited.
In other markets, bitcoin prices saw a short-term bullish breakout to start the week after a decline witnessed on Sunday. BTCUSD briefly dipped below $9,000 but managed to regain upside bias and jumped to the $9,240 area that continues to cap bullish attempts in the market. As long as the digital currency remains below $9,300, its dynamics can’t be considered as bullish.