US stock markets ended solidly higher on Monday, with Dow Jones adding over 3% during the session despite the sharp increase in coronavirus cases in the United States. Johnson & Johnson rallied 8.0% after announcing that it would begin human trials by September for a vaccine for the coronavirus. In Asia, equities were mixed-to-positive on Tuesday. China’s Shanghai Composite gained just 0.11% by the end of the session despite the official manufacturing PMI for March came in at 52.0 versus 45 expected. Japan’s benchmark Nikkei 225 lost 0.8% while Australia’s S&P/ASX 200 shed 2.0%.
Meanwhile, European stocks opened higher and are now on track for their seventh gain in nine sessions amid slowing growth in new coronavirus cases and progress on a vaccine. Also, the unexpectedly strong data out of China helped to lift investor sentiment. The pan-European Stoxx 600 climbed nearly 2.0% in early trade. On the data front, Spain’s GDP grew by 0.4% in the fourth quarter, below an earlier flash estimate of 1%. Anyway, traders have nearly ignored the release as the numbers are outdated already. Eurozone March preliminary CPI came in at+0.7% versus +0.8% y/y expected.
In currency markets, the dollar continues to regain ground nearly across the board, sending the euro to the 1.0970 area. After a break below the 1.10 handle, the short-term technical picture has deteriorated somewhat, as the pair is now back under the key moving averages that act as resistance levels again. Should the common currency fail to hold around the current levels, the 1.0950 intermediate support will come into traders’ focus.
Meanwhile, gold prices have accelerated the decline amid broad dollar strength. The precious metal failed to confirm a break above $1,640 last week and switched into a corrective mode, now threatening the $1,600 psychological level. If the selling pressure persists in the near term, the bullion may get below this handle and retarget the $1,590 area. Positive risk sentiment adds to a bearish bias in gold prices today. However, a longer-term outlook for the yellow metal remains positive as the coronavirus turmoil is far from over at this stage.