MARKET WRAPS

Stocks:

European stocks held to a tight range on Monday, pausing after a rally which has seen equities rise five of the last six weeks.

After rising 1.2% last week, the Stoxx Europe 600 slipped 0.4%.

Nokia shares jumped 6.4%, catching up to a rally to its U.S.-listed stock after Goldman Sachs lifted its rating on the telecom equipment maker to buy from neutral.

Shares of U.K. luxury goods group Burberry slumped 7% after Marco Gobbetti said he would be leaving the company at the end of the year to take the same role at leather goods maker Salvatore Ferragamo in his native Italy. Burberry said it has begun a search for his successor.

U.K. bakery Greggs rose 3% in early trading before losing some of those gains, after saying the sales recovery since its May 10 update was stronger than anticipated.

U.S. Markets:

Stock futures wavered Monday, suggesting major indexes will hover close to record highs after the S&P 500 posted its biggest weekly advance since February.

Futures for the broad market gauge, which closed Friday at its 31st all-time high of the year, drifted between muted gains and losses.

Shares have marched higher since mid May, boosted by a robust economic recovery, the prospect of further fiscal stimulus and low bond yields that prompted investors to snap up stocks. Some investors are nonetheless concerned the market could hit a rough patch amid signs that growth has peaked as well as jitters over the outlook for inflation and monetary policy.

"This recovery still has a long way to go and there is still strong growth," said Frank Øland, chief strategist at Danske Bank. "But of course you're probably past the peak growth momentum in the U.S., so data will begin to look less impressive, and that could be a concern."

Danske has dialed down its holdings of U.S. stocks and bought more shares in Europe, where Mr. Øland said the economic recovery is still accelerating.

Investors said financial markets were likely to be quiet this week in the run-up to Friday's employment report. That is expected to show the economy added 683,000 jobs in June. Money managers also will parse eurozone data on consumer prices on Wednesday for signs of whether inflation is taking off globally.

Stocks will continue to perform well if money managers retain confidence that the burst of inflation will die down, keeping bond yields at relatively low levels, said Edward Park, chief investment officer at Brooks Macdonald. "Investors deploying capital will have the option of losing money in the bond market after inflation, losing it in cash or putting it into risk assets."

Forex:

The dollar should this week continue to reverse its initial gains following the Federal Reserve's last policy meeting unless the June U.S. nonfarm payrolls report on Friday exceeds expectations, MUFG Bank said.

Earlier this month, the Fed brought forward its expectations for the first post-pandemic interest rate rise. However, comments from Fed Chair Jerome Powell and New York Fed President John Williams last week "helped to dampen fears over an even more abrupt shift to tighter Fed policy," MUFG currency analyst Lee Hardman said.

"Their continued desire to achieve full employment before raising rates provides reassurance that rate hikes are unlikely until late next year/early 2023," he said.

Sterling will weaken if the EU fails to respond to the U.K.'s request to extend a grace period for chilled-meat imports into Northern Ireland by the June 30 deadline, ING said.

"The mood music on this had been positive last week, but failure to hear anything before Wednesday--e.g. would the waiver on EU rules be extended to end-year and would the U.K. propose this unilaterally--could unnerve GBP," ING analysts said.

"EUR/GBP looks set to continue trading quiet ranges unless we see a break above the 0.8610/20 area--where some GBP under-performance could emerge."

Bitcoin rose 8.5% from its price at 5 p.m. ET Friday to $34,935.98. The U.K.'s lead financial regulator over the weekend ordered Binance Holdings Ltd.'s local entity to cease its operations in the country. Binance is the world's biggest cryptocurrency exchange network.

Bonds:

In the bond market, the yield on 10-year Treasury notes edged down to 1.516% from 1.535% Friday.

Barclays strategists said they expect the European Central Bank to use its strategy-review announcement later this year to lay the groundwork for a dovish transition in quantitative easing even in a post-PEPP [Pandemic Emergency Purchase Program] world in 2022.

They say they expect asset purchases to continue at an average monthly pace of around EUR60 billion in 2022, mainly via the regular Asset Purchase Program.

"This should be a dovish surprise to the market relative to current expectations," Barclays said.

This would imply that the ECB would keep absorbing a "very large" portion of net sovereign bond supply in the rest of 2021 and 2022, Barclays said.

The ECB is expected to release the strategy review in the course of the autumn, possibly as early as September.

Commodities:

Brent-crude futures, the benchmark in international energy markets, slipped. Traders are awaiting a meeting of the Organization of the Petroleum Exporting Countries and its allies on Thursday. The cartel is expected to discuss a modest increase in production.

Gold prices ticked higher after U.S. price data came in below expectations Friday.

While gold is typically considered an inflation hedge, gold investors are concerned that strong inflation would prompt the Fed to raise interest rates sooner than initially suggested. That could lift bond yields and weigh on the precious metal.

Copper prices edged lower at the start of the week amid concerns about the health of a major Chinese state-owned asset manager. Three-month copper on the LME edged down 0.2% to $9,421 a metric ton.

Sentiment among Chinese traders weakened after reports that China had asked another state-owned investment company to look over the books of China Huarong Asset Management, said Anna Stablum at brokerage Marex.

China Huarong has been the subject of concerns since it missed a deadline to report results at the end of March. That stoked speculation that the firm might be close to default, said Stablum.

Data in focus this week will be U.S. consumer confidence Tuesday, followed by Chinese Manufacturing PMI and U.S. jobs data later in the week.

EMEA HEADLINES

Macron, Le Pen Stumble in France's Regional Elections Amid Resurgence of Establishment Parties

PARIS-The centrist ranks of President Emmanuel Macron and Marine Le Pen's far-right party both failed to notch victories in France's regional elections Sunday as voters gravitated toward establishment candidates amid tensions over recent terrorist attacks and the place of Islam in society.

Conservative candidates campaigning on anti-immigration and law-and-order pledges won seven regional presidencies across France while the Socialist Party won the other five.

Swedish Prime Minister Resigns

STOCKHOLM--Swedish Prime Minister Stefan Lofven resigned Monday in what he called the most difficult political decision he has ever made.

Having lost the backing of the country's Left Party--whose support he replied upon to govern--over proposals to scrap controlled rents in newbuild housing, the Prime Minister last week lost a no-confidence vote.

U.S. Conducts Airstrikes in Syria and Iraq Against Iranian-Backed Militias

WASHINGTON-The U.S. conducted airstrikes in Syria and Iraq against two Iranian-backed militias that the Pentagon said were mounting drone attacks against U.S. troops.

The Pentagon said operational and weapons-storage facilities had been struck near the Syria-Iraq border at three locations that it said had been used by the Kata'ib Hezbollah and Kata'ib Sayyid al-Shuhada militia groups.

Binance Crypto Exchange Ordered to Cease U.K. Activities

Authorities in the U.K. and Japan took aim at affiliates of Binance Holdings Ltd., the world's largest cryptocurrency exchange network, in the latest regulatory crackdown on the wildly popular trade in bitcoin and other digital assets.

The U.K. Financial Conduct Authority, the country's lead financial regulator, told consumers Saturday that Binance's local unit wasn't permitted to conduct operations related to regulated financial activities.

How a Beer Giant Manages Through Waves of Covid-19 Around the World

In late March, executives at the biggest brewer in the world were working on a project they had code-named EU-phoria.

The U.K. was scheduled to reopen outdoor dining in a few weeks, followed by much of Europe. Anheuser-Busch InBev SA's data scientists were projecting beer sales would surge as people reunited with friends and family after monthslong lockdowns.

Delta Variant Outbreak in Israel Infects Some Vaccinated Adults

TEL AVIV-About half of adults infected in an outbreak of the Delta variant of Covid-19 in Israel were fully inoculated with the Pfizer Inc. vaccine, prompting the government to reimpose an indoor mask requirement and other measures to contain the highly transmissible strain.

Preliminary findings by Israeli health officials suggest about 90% of new infections were likely caused by the Delta variant, according to Ran Balicer, who leads an expert advisory panel on Covid-19 for the government. Children under 16, most of whom haven't been vaccinated, accounted for about half of those infected, he said.

Malta, Philippines Placed on Terror-Financing Watch List

Four jurisdictions, including Malta and the Philippines, will undergo increased monitoring as they face pressure from a global watchdog to address deficiencies in their anti-money-laundering efforts.

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06-28-21 0616ET