Continued market jitters keep European stocks in the red

The US markets were closed overnight in observation of Juneteenth.

When shifting to European markets, the benchmark Stoxx 600 index closed 1 per cent lower Monday, with almost all sectors in negative territory. Chemicals stocks led losses, down 2.8 per cent, while banking stocks ended just above the flatline.

European markets fell at the start of the new trading week as investors remained jittery over the economic outlook.

Construction and material stocks fell 2.5 per cent amid warnings of a looming U.K. mortgage crunch and a dip in house asking prices, as figures showed the average rate of a two-year fixed-rate deal crept over 6 per cent for the first time since December.

The Bank of England will announce its latest interest rate decision on Thursday, along with the Swiss National Bank.

When looking to Asia, markets were also largely lower, although Japan’s markets were still hovering near 33-year highs.

Asia investors will be looking ahead to China’s loan prime rate decision on Tuesday, after the world’s second-largest economy cut some of its key lending rates last week.

On the diplomatic front, US Secretary of State Antony Blinken was in Beijing on a diplomatic mission to repair strained ties between the US and China.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, emphasises that a sustainable recovery in the US housing market relies on improved affordability, which can be achieved through lower mortgage rates, falling home prices, or both, as the current mortgage payments account for a significant portion of after-tax incomes.

Meanwhile, Goldman Sachs attributes the strength in equities to factors such as decreasing inflation, ongoing optimism regarding artificial intelligence, and growing discussions about a potential "soft landing."

Futures

The SPI futures are pointing to a 0.2 per cent gain

Currency

One Australian dollar at 7:15 AM was buying 68.49 US cents.

Commodities

Iron ore futures are pointing to a 1 per cent fall.

Gold lost 0.45 per cent. Silver fell 0.35 per cent. Copper lost 0.62 and oil was down 0.68 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower. London’s FTSE fell 0.71 per cent, Frankfurt lost 0.96 per cent while Paris closed 1.01 per cent lower.

In Asian markets, Tokyo’s Nikkei fell 1.00 per cent, Hong Kong’s Hang Seng lost 0.64 per cent while China’s Shanghai Composite closed 0.54 per cent lower.

Yesterday, the Australian sharemarket closed 0.60 per cent higher at 7295.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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