Brief respite for financial markets ahead of a raft of economic data

Equity markets in Europe and Asia showed a brief respite for on Monday after a week of sharp losses on the back of growing recession concerns. The impact of the French legislative election results, leading to a period of political uncertainty in the second economy of the Euro zone, which could be considered as a temporary setback for the EU appeared finally limited. Interest rates spreads between southern European countries and Germany remained capped by the ECB’s pledge to find a mechanism to avoid spikes in bond yields. The EURUSD continued to trade close to recent lows around 1.05.

No major market movers on the agenda again today. Key figures such as consumer confidence in the EU, PMIs in the US and Europe as well the German IFO Business Climate index will be released from tomorrow until Friday and should set the tone of financial markets. In the meantime, the direction of US equity markets after a bank holiday yesterday will be closely watched in Europe. Finally, the UK will face a major train workers strike today and later this week due to failing wages negotiations on the back of surging cost of living, a move that could be replicated elsewhere in Europe in the coming weeks and months.