Shares opened lower in Europe, extending overnight losses for Asian benchmarks following yesterday’s pessimistic outlook in the minutes of the FOMC’s meeting. The uncertain tone continues to weigh on global market sentiment as investors, still digesting the mixed news about a vaccine, are cautiously assessing virus data as lockdown measures are eased around the world. Moreover, the deteriorating relationship between the US and China took another turn yesterday after President Trump renewed criticism of China’s leadership via a series of tweets. This poses a serious problem to investors as these rising tensions combined with the virus crisis may put the recent Washington-Beijing Phase One deal at risk, making stock markets even harder to predict. Investors will keep their focus on data today with several significant releases from both the US and the UK.
Most European markets are trading slightly lower today, with the Stoxx-50 Index still flirting with 2,900pts. The price has consolidated inside a 70 points-wide trading range, between both moving averages (144 and 233) while the Stochastic indicator is showing a bearish divergence which points to slowing down of the trend in the very short-term. If there is a breakout below 2,875pts, the next targets would be 2,785pts and 2,700pts.
