By Peter Nurse
Investing.com - European stock markets are seen opening cautiously higher Monday, helped by signs of economic growth in China but with rising Covid cases continuing to create doubts about the global recovery.
At 2:15 AM ET (0615 GMT), the DAX futures contract in Germany traded 0.4% higher, the FTSE 100 futures contract in the U.K. rose 0.1%, while CAC 40 futures in France climbed 0.4%.
China reported a strong Caixin manufacturing Purchasing Managers Index reading of 52.8 earlier in the day, indicating that the Chinese manufacturing sector continued to expand in July. The reading also corroborated the official manufacturing PMI of 51.1 released on Friday.
The focus will now turn to manufacturing PMI data for the European region later Monday, to see whether this also points to a recovery for the sector during July. This comes after eurozone GDP data, released last week, showed a decline of 12.1% in the second quarter of 2020, the largest quarterly decline on record.
Meanwhile, the number of Covid-19 cases continues to rise. The total number of cases globally topped 18 million as of August 3, according to Johns Hopkins University data, with deaths rapidly approaching 700,000.
The United States is in a new phase of the novel coronavirus outbreak with infections "extraordinarily widespread" in rural areas as well as cities, White House coronavirus experts said on Sunday.
Worries are high that continuing waves of coronavirus infections may halt what had been a budding recovery in the world’s biggest economy, particularly as Congress failed to reach an agreement over the latest stimulus measures before some earlier measures expired on Friday.
Earnings season continues this week, with HSBC (LON:HSBA), the U.K.’s biggest bank, in the spotlight after posting pretax profits of $4.3 billion, down 65% from the same period last year, adding that it has set aside between $8 billion and $13 billion this year for bad loans.
Oil prices headed lower Monday, with traders fretting about the recovery in demand just as the major crude producers move to increase supply into the market.
Oil output by the Organization of the Petroleum Exporting Countries rose by over 1 million barrels a day in July as Saudi Arabia and other Gulf members ended their voluntary extra supply curbs on top of an OPEC-led deal.
OPEC+, a grouping of OPEC and allies including Russia, is set to step up output in August, adding about 1.5 million bpd to global supply.
This comes as a second wave of coronavirus cases has caused countries around the globe to scale back some of their reopening plans, hitting demand for oil.
U.S. crude futures traded 0.7% lower at $39.97 a barrel, while the international benchmark Brent contract fell 0.5% to $43.40.
Elsewhere, gold futures rose 0.4% to $1,982.60/oz, reaching a record high and continuing its march towards the $2,000 mark, while EUR/USD traded at 1.1759, down 0.1%.