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European Shares Seen Up As US-China Trade Tensions Ease

stockmarkets aug17 01jun20 lt

European stocks look set to open a tad higher on Monday after data showed the Chinese economy moved from contraction into expansion in May.

The official manufacturing PMI dropped to 50.6 in May from 50.8 in April, while the Caixin/Markit manufacturing PMI for the month corroborated the expansion, with a reading of 50.7.

Asian markets advanced, with Hong Kong's Hang Seng climbing more than 3 percent, after U.S. President Donald Trump did not extend his threat of punitive actions beyond the city to mainland China.

As the total number of global Covid-19 cases surpass the six million mark, markets now await a meeting of the European Central Bank on Thursday amid expectations the central bank will boost the bond buying by around 500 billion euros to 1.25 trillion.

Friday's release of the U.S. employment data for May will also be the focal point of the week as lockdowns ease.

Closer home, final Purchasing Managers' survey results from euro area and the U.K. are due later in the day, headlining a light day for the European economic news.

The dollar weakened and oil edged lower on profit taking ahead of an upcoming OPEC+ meeting, while gold ticked up on concerns about riots in U.S. cities sparked by the death of unarmed black man George Floyd at the hands of police.

U.S. stocks ended mostly higher on Friday after President Trump made no mention of tariffs during his highly-anticipated press conference on China.

Trump ordered his administration to begin the process of eliminating special U.S. treatment for Hong Kong and also said he is terminating the U.S.' relationship with the World Health Organization, claiming China has total control of the agency.

The tech-heavy Nasdaq Composite climbed 1.3 percent and the S&P 500 added half a percent, while the Dow Jones Industrial Average slid 0.1 percent.

European markets fell sharply on Friday on concerns that rising U.S-China tensions may create more problems for the global economy.

The pan-European Stoxx Europe 600 index lost 1.4 percent to snap a four-session winning streak.

The German DAX tumbled 1.7 percent, France's CAC 40 index shed 1.6 percent and the U.K.'s FTSE 100 plunged 2.3 percent.

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