Investing.com – European stock markets are seen edging lower at the open Monday, starting the week on a cautious note with investors focusing on developments surrounding the pandemic and vaccine rollouts.
U.K. Prime Minister Boris Johnson will set out a roadmap to ease England’s third national lockdown on Monday, having met a target to vaccinate 15 million Britons from higher-risk categories by mid-February.
That said, Johnson has cautioned that there was a need to avoid complacency, and the lockdown would only be lifted slowly. Newspaper reports suggest that the travel and hospitality industry is unlikely to be functioning anywhere near normality by the important Easter break.
The U.K. has been the bright spot in Europe in terms of the speed of its vaccination rollout, and concerns exist that continental Europe will still be locked down for some time to come. Indeed, the mayor of Nice in southern France called Sunday for a weekend lockdown to reduce the flow of tourists as it battles a sharp spike in coronavirus infections.
“While we expect economic growth to start a sharp recovery this year, it will clearly lag inflation as lockdowns are still set to continue for the short-term,” said analysts at ING, in a research note.
Worries about inflation have led to rapidly rising bond yields in recent weeks, and this has concerned some equity investors as they could diminish the relative appeal of stocks.
Federal Reserve Chair Jerome Powell delivers his semi-annual testimony before Congress this week and is likely to reiterate a commitment to keeping policy very accommodative for a prolonged period, while European Central Bank President Christine Lagarde is also expected to take a similar tone in a speech later Monday.
The economic calendar is relatively quiet Monday, with only Germany’s Ifo Institute releasing its February survey on the country’s business climate.
Oil prices climbed Monday as U.S. production returned only slowly from last week’s severe cold snap, further tightening a global market where inventories have fallen sharply in recent weeks.
It will likely take several more days for oilfield crews to get production fully up again after the cold snap in Texas, the largest crude producing U.S. state, and the surrounding region forced the shut down of an estimated 4 million barrels per day.