- Monday's stock market performance was mixed, owing to concerns about European COVID limitations and the possibility of faster removal of Federal Reserve stimulus. The treasury yield curve was nearing its flattest since the outbreak of the pandemic.
- Shares fell in Japan, varied in Hong Kong, and surged in China, where the central bank hinted at policy easing to help a weakening economy. Futures in the United States rose after sectors sensitive to the economy led the S&P 500 lower on Friday, while the technology-heavy NASDAQ 100 excelled in an echo of the stay-at-home trade.
- Treasuries pared a rise, and the yield spread between 5-Year and 30-Year maturities was around its lowest since March 2020. Bonds were boosted on risk aversion on Friday, as rising European infections pushed Austria into a lockdown and prompted Germany to strengthen controls. The curve flattened in part due to signals that the Fed may consider reducing its bond-buying program more quickly.
- The dollar index remained stable. Oil prices continued to fall on the threat of important consumers stockpiling emergency supplies, as well as Europe's COVID flareup. According to a source, Japan and the United States may make a joint declaration on the release of oil reserves as soon as this week.
- In China, yuan strength was also in the spotlight as a currency panel urged banks to restrict speculative foreign-exchange trading. According to a central bank consultant, the Chinese economy may enter a period of "quasi-stagflation."
