The U.S. and China have canceled plans for a virtual weekend meeting
Wall Street stocks finished nearly unchanged on Friday as investors digested mixed economic data, with retail sales being lower than expected in July. The benchmark S&P 500 index declined just 0.01%, closing near a record high. The Dow Jones Industrial Average added 0.1%, and the Nasdaq Composite edged lower by 0.2%. The U.S. and China have canceled plans for a virtual weekend meeting to assess their phase one trade deal. The meeting was postponed indefinitely.
Today in Asia, stocks were mostly higher, as investors assessed the U.S.-China relations. Tensions keep rising on this front, with the U.S. President Donald Trump threatening to exert more pressure on Chinese tech companies such as Alibaba. Despite these reports, China’s Shanghai Composite was up 1.97% on Monday. In Japan, Nikkei 225 was down 0.72% after the data showed a record economic contraction in the second quarter, with gross domestic product shrinking 27.8% year-on-year.
European stocks opened marginally higher on Monday, with growing risks from an uptick in coronavirus cases in the continent continuing to weigh on sentiment after the United Kingdom added France and some other countries to its quarantine list a few years ago. Of note, the UK on Sunday marked the sixth day of more than 1,000 jump in daily virus cases. There are no major earnings or data releases from the Eurozone on Monday.
Meanwhile, most currencies little changed on Monday due to a lack of fresh drivers. EURUSD is flat around 1.1850, GBPUSD is flirting with the 1.31 handle while USDJPY is edging lower, extending the retreat from the 107.00 level that continues to cap the upside potential in the pair. Later this week, the Eurozone PMIs as well as the ECB and FOMC meeting minutes could affect short-term dynamics in the USD-pairs.
Elsewhere, oil prices continue to oscillate around the $45 handle, with the downside pressure has intensified in recent trading. If Brent fails to hold above the $44.50 area, the $44 support will come back into market focus. In the immediate term, sentiment in the oil market will continue to depend on the overall tone in the global financial markets.