European stock market futures have extended the Friday gains as investors applauded strong factory and manufacturing data. Although the gains are capped by concerns over coronavirus infections and rising US-China tensions, the investor’s sentiments still appear strong.

Last week, President Donald Trump has issued executive orders to ban transactions with WeChat and TikTok in 45 days. However, stronger than expected US job data soothed investor’s sentiments.

“The bigger question for markets is whether these actions jeopardize the U.S.-China trade talks on August 15 and markets will be looking closely for any Chinese retaliation,” Tapas Strickland, director of markets & economics at National Australia Bank said.

The nonfarm payroll data indicated that the U.S. has added 1.763 million jobs in July, compared to the consensus estimate for a 1.4 million increase.

ING chief economist Carsten Brzeski said: “With all the risks of a second lockdown wave, an increase of permanent unemployment and structural changes to the economy stemming from COVID-19, it is however very unlikely that this ‘V’ will last for long.”

European industrial output soared sharply in the last couple of weeks. For instance, German industrial output grew 8.9% in June, driven by a 14.9% growth in exports.

Market analysts expect substantial growth in industrial output over the coming months. French industrial production grew 12.7%, beating economists’ estimates for a 10% increase.

Asian markets have also extended gains on Monday, thanks to strong business reports from China. It generated a better-than-expected consumer price index for July, and index grew 2.7% from the previous month and up 0.6% year-on-year.

Although the producer price index dropped compared to the year-ago period, the index grew compared to the past month.

What Does it Mean for Traders?

  • European futures are in green.
  • The gold price is steady.
  • The US dollar regained some momentum.
  • Oil price rose on Monday amid hopes over US economic recovery