Investors will be keeping an eye on a planned virtual summit between Xi Jinping and Joe Biden, with relations between the superpowers strained by a range of issues including Taiwan and trade

London (AFP) - US markets opened higher Monday heading into the tail end of a strong earnings season and ahead of fresh inflation data, as European investors mostly sent stocks higher and oil prices fell.

Extra encouragement came from a boosted November manufacturing survey from the New York Fed, as well as strong retail and industrial data from China.

But inflation remains in the spotlight as financial players await price growth updates this week from the eurozone and UK after soaring numbers out of the US and China.

“I’m encouraged by the resilience we’re seeing in the markets which are again factoring in higher inflation and earlier rate hikes,” said Craig Erlam, senior market analyst at OANDA.

“But then I wonder what will be the catalyst for the rally to continue,” Erlam said.

US President Joe Biden and China’s Xi Jinping meanwhile speak Monday at a virtual summit aimed at defusing some of the tensions that have built up over Taiwan and other flashpoint issues, but with both sides signalling little appetite for compromise.

European and Asian equity markets mostly enjoyed gains Monday after another healthy pre-weekend showing on Wall Street, though global inflation concerns after news last week of surging prices in the world’s two biggest economies dampened the mood.

- Inflation fears -

“Higher inflation data… coupled with the festering global supply chain challenges have fostered some of the recent market volatility, and uncertainty regarding the path of monetary policies,” Charles Schwab analysts wrote.

While optimism about the global economic recovery remains intact, the rise in prices at rates not seen for decades has traders increasingly worried that central banks will have to tighten monetary policy quicker and more sharply than previously thought.

Data out of the United States last week showing consumer sentiment at a 10-year low indicated that the issue is being felt more in people’s pockets, putting pressure on the Federal Reserve to step in.

However, for now officials are sticking to their view that the inflation spike will be temporary and peter out as supply chain problems are resolved.

Tokyo’s stock market enjoyed a strong showing Monday, shrugging off news that the Japanese economy contracted more than forecast in the third quarter.

A new stock exchange focused on smaller-scale firms meanwhile began trading in Beijing on Monday, as China cracks down on domestic tech giants.

- Key figures around 1445 GMT -

New York - Dow: UP 0.1 percent to 36,150.22 points

London - FTSE 100: DOWN 0.2 percent at 7,331.69

Frankfurt - DAX: UP 0.1 percent at 16,103.21

Paris - CAC 40: UP 0.4 percent at 7,116.36

EURO STOXX 50: UP 0.2 percent at 4,379.13

Tokyo - Nikkei 225: UP 0.6 percent at 29,776.80 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 25,390.91 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,533.30 (close)

Euro/dollar: DOWN at $1.1438 from $1.1445 on Friday

Pound/dollar: UP at $1.3430 from $1.3413

Euro/pound: DOWN at 85.18 pence from 85.33 pence

Dollar/yen: DOWN at 113.95 yen from 113.85 yen

Brent North Sea crude: DOWN 1.5 percent at $80.92 per barrel

West Texas Intermediate: DOWN 1.7 percent at $79.46 per barrel

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