Biden said that China trade tariffs could be reduced of lifted
Asian stocks were mixed on Monday, with Chinese tech shares leading the losses. Markets were spooked by the news that Beijing has reported a record number of Covid cases during its current outbreak. On the positive side, US president Biden said that China trade tariffs may be under consideration for being reduced (or even lifted). As such, MSCI’s broadest index of Asia-Pacific shares outside Japan finished flat along with China’s Shanghai Composite. In Japan, the Nikkei 225 gained nearly 1% while Hong Kong’s Hang Seng fell 1.12%.
In Europe, equities opened higher, extending Friday’s gains that followed a volatile and nervous week. The pan-European Stoxx 600 climbed 1.1% in early deals, with US stock index futures pointing higher in early premarket trade as investors digest Biden’s latest comments on China tariffs. Elsewhere, Germany said it is ready to go ahead with Russian oil embargo even without Hungary.
As risk sentiment keeps improving, the safe-haven dollar continues its retreat at the start of the week. The USD index failed to regain the 103.00 figure, shedding nearly 0.5% in early European trading hours, with technicals pointing further retracement after last week’s losses. Against this backdrop, EURUSD exceeded the 1.0600 mark, challenging early-May highs. The next resistance arrives at this month’s high of 1.0640, followed by the 1.0655 zone.
Elsewhere, oil prices retain a bullish bias, advancing for the third session in a row on Monday. Earlier today, Biden noted that the release of strategic oil reserves helped but they are not enough. He also called for OPEC to raise oil production. Adding to a more upbeat tone in the market, the weakening greenback stays on the defensive. Brent crude advanced to $114 a barrel before retreating marginally in recent trading. It looks like oil prices would target last week’s high of 115.67 should Brent preserve the upside momentum in the coming days.