Investing.com – European stock markets pushed largely higher Monday, amid confidence in the global economic recovery despite an ever-rising number of Covid-19 cases.

At 3:35 AM ET (0735 GMT), the DAX in Germany traded 0.5% higher, France’s CAC40 rose 0.1%, the U.K.’s FTSE index was flat.

The profits of Chinese industrial enterprises rebounded in May for the first time since November 2019, data confirmed Sunday, signaling the world’s second-largest economy is continuing to recover from the coronavirus shutdowns.

This is important news for Europe, and particularly Germany, as China is one of the largest export markets for European goods.

German Chancellor Angela Merkel is set to host French President Emmanuel Macron for talks later Monday. The two leaders are likely to discuss how to get agreement on the recovery fund for the region given opposition to the Franco-German inspired plan to distribute the funds to hard hit areas as(repayable) loans, or as grants. The International Monetary Fund weighed into the debate, with Chief Economist Gita Gopinath saying in Der Spiegel that a substantial part of the European Union’s package of measures must consist of grants.

Still, worries remain over the spread of the coronavirus, with the World Health Organization reporting almost 190,000 new cases for the 24-hour period through early Sunday, a new high. 

This means the total number of global Covid-19 cases has now topped the 10 million mark, with more than 500,000 deaths recorded globally. Despite the spite in infection numbers, mortality rates are much lower than during the first wave of the pandemic, mainly because the new infections have been largely confined to younger people.

The EU-U.K. free trade negotiations are also scheduled to restart this week in Brussels, with time running out and few signs of any progress made in the negotiations over the future relationship.

Economic data centers around the European economic confidence indicators for June, due at 5 AM ET (0900 GMT), along with preliminary inflation data for June from Germany and Spain, and consumer and mortgage lending from the U.K.

In corporate news, Airbus (PA:AIR) stock climbed 1.3% despite CEO Guillaume Faury stating the aircraft manufacturer is assuming a 40% drop in production over the next two years due to the coronavirus crisis. He added that the company intends to announce possible job cuts before the end of July, thus cutting costs.

Oil prices fell back Monday, amid worries that the increase in the number of global Covid-19 cases which has led some countries to resume partial lockdowns could hurt fuel demand. Years of low natural gas prices finally forced Chesapeake Energy (NYSE:CHK) to seek bankruptcy protection in recent years over the weekend.

At 3:35 AM ET, U.S. crude futures traded 1.6% lower at $37.87 a barrel. The international benchmark Brent contract fell 1.4% to $40.34.

Elsewhere, gold futures rose 0.1% to $1,782.05/oz, while EUR/USD traded at 1.1248, up 0.3%.

SINGAPORE (Reuters) – Oil prices slid for a second straight session on Monday as coronavirus cases rose in the United States and other places, leading countries to resume partial lockdowns that could hurt fuel demand.

Brent crude (LCOc1) dropped 72 cents, or 1.8%, to $40.30 a barrel by 0231 GMT, while U.S. crude (CLc1) was at $37.82, down 67 cents, or 1.7%.

Brent crude is set to end June with a third consecutive monthly gain after major global producers extended an unprecedented 9.7 million barrels per day supply cut agreement into July, while oil demand improved after countries across the globe eased lockdown measures.

However, global coronavirus cases exceeded 10 million on Sunday as India and Brazil battled outbreaks of over 10,000 cases daily. New outbreaks are reported in countries including China, New Zealand and Australia, prompting governments to impose restrictions again.

“The second wave contagion is alive and well,” Howie Lee, economist at Singapore’s OCBC bank said. “That is capping the bullish sentiment that we’ve seen in the last six to eight weeks.”

Other factors restricting oil prices’ advance at this stage include poor refining margins, high oil inventories and the resumption of U.S. production, Lee said.

Despite efforts by OPEC+ – the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – to reduce supplies, crude inventories in the United States, the world’s largest oil producer and consumer, have hit all-time highs. [EIA/S]

“There is also a risk that gains in prices recently could see some U.S. shale producers restart wells,” ANZ analysts said.

Even as the number of operating oil and natural gas rigs dropped to a record low last week, higher oil prices are prompting some producers to resume drilling.

“In the next one-two weeks, we should see an uptick in rig count commensurate with the pick-up in oil production,” OCBC’s Lee said.

Elsewhere, U.S. shale oil pioneer Chesapeake Energy Corp (N:CHK) filed for bankruptcy protection on Sunday as it bowed to heavy debts and the impact of coronavirus outbreak on energy markets.

SYDNEY (Reuters) – Asian share markets began the week with a cautious tone on Monday as the relentless spread of the coronavirus finally made investors question their optimism on the global economy, benefiting safe harbour bonds and the U.S. dollar.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6% and further away from a four-month top hit last week. Japan’s Nikkei shed 1.3% and Chinese blue chips 0.6%.

In a more promising sign, E-Mini futures for the S&P 500 recouped their early losses to edge up 0.3% and EUROSTOXX 50 futures added 0.2%. FTSE futures dipped 0.2%.

Wall Street had faltered on Friday as some U.S. states reconsidered their reopening plans. The global death toll from COVID-19 reached half a million people on Sunday, according to a Reuters tally.

About one-quarter of all the deaths so far have been in the United States, with cases surging in a handful of southern and western states that reopened earlier.

“The increase in U.S. COVID-19 infection rates has dented momentum across markets despite the improvements in the global economy, which continues to beat most data expectations,” wrote analysts at JPMorgan (NYSE:JPM) in a note.

“Our strategists remain sanguine and recommend to buy on dips but also selectivity,” they added. “Traditional hedges like JPY vs USD, USD vs EM FX, gold and quality stocks are still outperforming this month. We stay overweight U.S. equities but move EM equities to neutral and stay neutral U.S. credit.”

Sovereign bonds benefited from the shift to safety with yields on U.S. 10-year notes falling to 0.64%, having briefly been as high as 0.96% early in June.

The U.S. dollar went the opposite direction, rising to 97.461 against a basket of currencies from a trough of 95.714 earlier in the month.

It was a shade higher on the yen at 107.20 on Monday, but well within the recent range of 106.06 to 107.63. The euro stood at $1.1240 having found solid support around $1.1167. [USD/]

It is an important week for U.S. data with the ISM manufacturing index on Wednesday and payrolls on Thursday, ahead of the Independence Day holiday. Federal Reserve Chair Jerome Powell is also testifying on Tuesday.

“U.S. economic data will reinforce that the economy is through the worst of the recession in our view,” said CBA currency analyst Joseph Capurso.

“But a double‑dip recession is possible if widespread restrictions are reimposed, leading to a surge in the dollar.”

In commodity markets, gold held near its highest since early 2012 at $1,771 an ounce. [GOL/]

Oil prices slipped amid concerns the pandemic would slow the reopening of some economies and thus hurt demand for fuel. [O/R]

Brent crude futures fell 70 cents to $40.32 a barrel, while U.S. crude lost 62 cents to $37.87.