Global stocks tumbled on Monday with US futures and European markets echoing the weakness that dominated the trading day in Asia and losing ground as delta variant cases continue to soar around the world.
Yields on 10-year Treasury notes were last at 1.251%, down 4.3 basis points on the day, reflecting the pickup in investor desire for safe-haven assets.
Investors are awaiting a potential vote on the Biden administration’s bipartisan infrastructure bill and are looking towards the release of housing market data.
The rising cases and resulting tightening of lockdown restrictions weighed on markets as investor concern over the impact on economic growth intensified, despite earnings season having got off to a strong start.
“There was a great deal of optimism over the summer reopening, however, as we look ahead to the rest of the year and look at how delta variant infections are rising, some of that optimism is dissipating, prompting the question as to where we go next for Q3 earnings expectations,” Michael Hewson, chief market analyst at CMC Markets said.
Asian markets led the dip on Monday as lockdown restrictions tightened across the continent. Hong Kong’s Hang Seng index lost 2.23%, while Tokyo’s Nikkei 225 fell by 1.25%, as COVID began to impact the Olympic game preparations in the country. The Shanghai Composite performed stronger, but still fell by 0.01%.
European markets followed suit as they opened, as Frankfurt’s DAX was last down 1.81% and the Euro Stoxx 50 dipped 1.95% lower. London’s FTSE 100 fell 1.91% as the UK reopened its economy and lifted virtually all COVID related restrictions despite a surge in new infections.
Investors are awaiting the European Central Bank’s rate decision that is expected later this week alongside a look at the future of the bank’s COVID support program.
Oil prices fell after OPEC+ reached a deal on supply, after the deadlock between Saudi Arabia and the United Arab Emirates was resolved over the weekend. From August, the alliance will boost supply by 400,000 barrels a day, with monthly production increases continuing until April 2022.
“Increased production is bearish in the short-term for oil prices, as Covid-19 demand concerns coincide with a speculative market that has filled its boots limit-long. On the other, it is a longer-term positive, as OPEC+ cohesion remains intact, without worries of a member’s production free-for-all.” Jeffrey Halley, senior market analyst at OANDA, said.
Business News Governmental News Finance News
Need Your Help Today. Your $1 can change life.