European equities opened on a positive note but erased gains quickly
Wall Street stocks finished mixed on Friday as investors digested US NFP employment data that came in a tad better than expected. Gains were capped by rising US-China trade tensions and the fact that Washington failed to produce a last-minute coronavirus aid package. The Dow Jones Industrial Average closed 0.2%, higher, the S&P 500 index gained just 0.1%, and the Nasdaq Composite Index retreated 0.9% as tech stocks fell.
Today in Asia, stocks traded mostly higher, with China reporting a better-than-expected consumer price index for July. China’s Shanghai Composite was up 0.29%, reversing some earlier losses. On the negative side, the U.S. slapped sanctions on senior Hong Kong and Chinese officials. Now, investors are shifting focus to the virtual meeting between officials from the two countries scheduled for August 15.
European equities opened on a positive note but erased gains quickly after China said it would sanction American officials in retaliation over Hong Kong. On the other hand, stocks remain afloat after Trump signed four executive orders to maintain some assistance, including for unemployment benefits, on Sunday.
Elsewhere, the dollar is mostly higher on Monday but the bullish potential looks limited as traders hesitate at the start of the week. EURUSD extends its pullback from two-year highs while deriving support from the 1.1750 area. Despite the pullback, the common currency remains within a strong bullish trend.
Meanwhile, Brent crude has climbed to the $45 area after some consolidation earlier in the day. There is heightened uncertainty in the market due to the upcoming trade negotiations and amid the ongoing pandemic. The futures lack the upside momentum to stage a sustainable ascent from the current levels, with bearish risks persisting further. In the short term, Brent may fail to break above $45 and could resume the decline. In this scenario, oil prices may threaten the $44 figure.
