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European markets decline, cautiousness prevails at the start of the week

(mtag101702) Author: Peter Nurse

investing. com – European markets open lower on Monday. Investors are making a cautious start to the new week.

DAX down 0.1% CAC 40 0.2% and FTSE 100 fell 0.1%.

Europe’s major indices finished last week with big increases. DAX increased by 1.7% CAC 40 gained over 2% and FTSE 100 rose 1.3%. Strong gains on Wall Street and expansionary politics in China have somewhat dampened the last felt concerns about global growth.

That said, there are plenty of reasons for investors to be cautious this week.

European Central Bank (ECB) Leader Christine Lagarde said on Sunday that the central bank will update its guidance on cash incentives at the next meeting, pointing out that a new policy to support the European economy could be implemented in 2022 instead of the current bond-buying program.

Last week, the ECB changed its stance on inflation – CPI rises above the 2% target will be tolerated if circumstances warrant.

Outside of Europe, the US will share inflation data for June this week. Fed Leader Jerome Powell will speak before Congress on Wednesday and Thursday and may provide clues to the central bank’s intentions for bond reductions.

On the other hand, China will release its second-quarter GDP data on Thursday. There is concern that information may be disappointing due to the sudden decision to expand monetary policy last week.

While the number of Covid-19 cases continues to rise in much of Asia, the country recorded the highest number of cases since mid-May due to the spread of the delta variant in regions of the USA with lower vaccination rates.

Quarterly profits kick off on Wall Street this week. Goldman Sachs (NYSE: GS), JPMorgan Chase (NYSE: JPM) and PepsiCo (NASDAQ: PEP) will report on Tuesday.

ASOS in Europe (LON: ASOS) may be of interest. US-based Nordstrom (NYSE: JWN announced that it has acquired a minority stake in four brands owned by the British online fashion residence, which includes names that appeal to younger customers such as Topshop and Miss Selfridge.

On the other hand, due to the increasing Covid-19 events around the world and the inability to reach an agreement on production levels in OPEC+, oil prices fell on Monday in the environment of uncertainty in the sector.

However, prices are still high. U.S. agencies reported massive declines in crude oil inventories and an increase in fuel demand.

WTI futures fell 0.2% to $74.39 Brent contract traded at $75.37, down 0.2%.

on the other hand gold futures processes fell 0.5% to $1,800.95 EUR/USD traded at 1.1868, down 0.1%.

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