EU markets muted as investors weigh up risks of new strains

Stocks in Europe were subdued on Monday morning as the number of new coronavirus cases across the UK continues to rise quickly.

In London, the FTSE 100 (^FTSE) was flat after opening, while the CAC (FCHI) likewise was treading water in France, and the DAX (GDAXI) pushed almost 0.2% higher in Germany.

In the week since 21 June, what would have been "freedom day" in Britain, coronavirus cases are up 59% in week-on-week figures. Currently in the UK, the Delta strain, which was first detected in India, makes up more than 99% of reported COVID-19 cases, data from Public Health England (PHE) showed.

New health secretary Sajid Javid will give an update later on when the final stage of Boris

Johnson's roadmap out of lockdown will be lifted in England. They are expected to be lifted on 19 July, however the PM said that there would be a data review to see if this could happen two weeks earlier on 5 July. Javid's address comes just hours after replaced Matt Hancock after he resigned on the weekend.

Analysts noted that there doesn't appear to have been much market reaction to Hancock's resignation due to the fact that nothing much policy wise is likely to change. Across the pond, S&P 500 futures (ES=F) were trading flat at the time of the European open, Dow futures (YM=F) were likewise muted, and Nasdaq futures (NQ=F) were 0.1% higher.

The Nasdaq and the S&P 500 set new records last week, however, the Dow and Russell 2000 lagged behind somewhat.

"The brief spike in the

US dollar that we saw in the aftermath of the Fed policy decision appears to have subsided as concerns about the timeline of US monetary policy were assuaged last week by Fed chair Jay Powell and New York Fed president John Williams," Michael Hewson, chief market analyst of CMC Markets said.

"The overarching narrative coming out from this week's events is that while the likes of St. Louis Fed president Bullard, and Dallas Fed Robert Kaplan have a view on how the Fed will need to act in the coming months, it is the views of the holy trinity of Jay Powell, Richard Clarida and John Williams that probably carry the most weight, and for now the Fed is not changing anything."

Asian shares started the week in a cautious mood overnight, as a spike in coronavirus cases across the region hit sentiment.