European stock futures soared sharply on Monday despite weaker than expected Eurozone economic data as Eurozone flash PMI data significantly impacted trader’s sentiments for a V-shaped recovery from the deepest economic downturn.
European stock markets plunged on Friday on economic data and concerns over trade tensions between the largest economies. The Stoxx Europe 600 reported a weekly loss last week. The German and British stock markets also reported big losses last week. On the flip side, Wall Street reported a 35th record close last week.
The flash IHS Markit French composite PMI plunged to the lowest level in two months in August. In addition, the overall eurozone composite PMI dropped to 51.6 in August from 54.9 in July, representing the lowest level in two-month.
The virus infections have been steadily increasing in Europe over the past couple of weeks, which is raising concerns over fresh lockdowns and social distancing policies.
French President Emmanuel Macron and the German Chancellor Angela Merkel says we must avoid lockdowns to improve the economic situation.
On the positive side, the U.K.’s composite PMI for August stood around 60.3 compared to the analysts’ expectations for 57.1. UK retail sales data also topped analyst’s estimates. The country’s retail sales grew by 3.6% in July. However, the government debt level hit a new all-time high of 2 trillion pounds due to pandemic.
Trade tensions between the largest economies have been adding bearish concerns. China wants US negotiators back on the table to discuss phase one trade deal. Both countries have recently suspended trade talks amid renewed tensions.
What Does it Mean for Traders?
- Gold price fell on Monday amid a rally in the US dollar.
- US dollar grew compared to the Euro.
- Euro fell back to 1.17 level against the US dollar after hitting 1.19 level last week.
- The oil price grew slightly on Monday.
- Asian markets are in green.