In Europe, stocks opened higher but failed to preserve gains and turned negative on the day
The US stock market was closed on Monday for the U. S. Labor Day holiday. Today in Asia, stocks traded in the green despite lingering uncertainty over the coronavirus pandemic. Japan released revised gross domestic product figures for the second quarter that showed the country’s economy shrinking an annualized 28.1%, worse than the preliminary result of -27.8%. The Nikkei 225 advanced 0.8% during the session despite weak numbers. Australia’s S&P/ASX 200 added 1.06%, South Korea’s Kospi gained 0.74% while Hong Kong’s Hang Seng was up just 0.14%.
In Europe, stocks opened higher but failed to preserve gains and turned negative on the day amid rising US-China tensions and rising virus cases in Germany and the UK. Also, investors are nervous ahead of Brexit talks due later today. Besides, a cautious approach is due to the upcoming ECB meeting due on Thursday as the central bank could indicate that downside risks have intensified amid the ongoing pandemic. U.S. futures pointed to a weaker open after the long holiday weekend.
Meanwhile, dollar demand persists as risk sentiment looks mixed. EURUSD is clinging to the 1.18 handle, struggling to regain the upside bias after failed attempts to break above the 1.20 barrier. Later today, the Eurozone unemployment and GDP data could affect short-term dynamics in the EURUSD pair. In a wider picture, the common currency remains within a longer-term bullish trend despite the current downside correction.
Elsewhere, oil prices extended losses to two-month lows around $41.20 in recent trading as investor sentiment turned sour again while dollar demand persisted. Besides, traders continue to express concerns over the outlook for demand recovery as Saudi Arabia cuts prices for its Asian buyers, citing weaker consumption in the region. In the short term, Brent will likely remain under the selling pressure and could even derail the $40 handle for the first time late-June if the API and EIA reports disappoint.
