European shares traded lower on Monday alongside US futures, on higher market volatility after last Friday’s quadruple witching trading session. Moreover, lingering uncertainties about the speed with which economies will reopen weigh on today’s market sentiment, especially after record infection numbers have been registered in some US states like Florida and Arizona. Utilities, industrial and energy shares are leading declines everywhere this morning. This cautious trading spirit may change through the day as investors were happy to see China’s willingness to comply with the Phase One deal negotiated with the US a year ago. Beijing’s confirmation that it has boosted purchases of US farm goods is likely to ease lingering concerns about the two bloc’s relationship and lift market sentiment on the short to mid-term outlook. Today’s market calendar is not particularly busy, but traders are likely to pay attention to speeches from ECB President Christine Lagarde as well as the Governor of Bank of England due in the early afternoon.
The Stoxx-50 Index trades slightly above the lower band of a flag pattern on a very short-term basis. This pattern usually indicates a market break before the trend resurgence but the DMI is showing the selling pressure increasing, which may point to a deeper market correction.
