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Brazilian stocks closed almost flat on Monday, the first trading day of August, as investors eyed guidance from Brazil’s central bank on the future path of interest rates with a gradual reopening of the economy in sight. The Bank is expected to cut rates further into record-low territory on Wednesday as it continues to try support the economy hit by the coronavirus pandemic. On the data front, Brazil manufacturing activity expands at record pace in July, while it posted the largest trade surplus on record.

Oil prices moved higher on Monday, with WTI crude rising 1.8% to $41.01 a barrel and Brent settling 2% higher at $44.38 a barrel as upbeat manufacturing data from around the world offset oversupply fears fueled by the prospect of the OPEC+ winding back output cuts. US manufacturing activity accelerated to its highest level in nearly 1-1/2 years in July, while factory activity in China expanded at the fastest pace in almost a decade. Capping further gains were intensified concerns that a record rise in global coronavirus infections could stall recovery in fuel demand.

Mexico’s IPC gained 557 points or 1.5% to 37,576 on Monday, as investors welcomed upbeat manufacturing data from around the world. The ISM Manufacturing PMI for the US rose to 54.2 in July, the highest reading since March of 2019 while manufacturing activity in China expanded at the fastest pace in nearly a decade. Market sentiment got a lift from news that Eli Lilly announced it would start a phase 3 trial of its experimental antibody drug.

US stocks started the week on a high note as the major averages sought to build on last month’s gains following upbeat manufacturing data from around the world. Technology shares led Wall Street higher Monday, with Microsoft climbing more than 5% after it formally declared interest in TikTok's US operations. However, Congress is still in disagreement over extended unemployment benefits as part of additional virus relief. The Dow Jones added 237 points or 0.9% to 26,665. The S&P 500 climbed 24 points or 0.7% to 3294. The Nasdaq jumped 158 points or 1.5% to a new record high of 10,903.

Russell 2000 increased to a 7-week high of 1508

Brazil’s trade surplus widened to a record USD 8.1 billion in July of 2020 from USD 2.4 billion in the same month last year and in line in market expectations. When adjusted for the working day average, exports declined 2.9 percent from a year earlier to USD 19.6 billion, while imports fell 35.2 percent to USD 11.5 billion. Among major trading partners, exports dropped to the EU (-9.8 percent) and the US (-37.4 percent) while shipments to Asia jumped 15.4 percent. Imports plunged to Asia (-16.8 percent), the EU (-33.6 percent) and the US (-46.5 percent).

The Baltic Dry Index, which tracks rates for ships ferrying dry bulk commodities, kicked off August on a positive note underpinned by higher capesize and panamax demand. Metals and steel demand from the construction and manufacturing industry in China, the world's top metals consumer, has strengthened, as infrastructure investment has accelerated on the recent uptick in industrial activity. Still, a rise in new Covid-19 cases worldwide threatens to disrupt global supply chains once again.

Merval increased to an all-time high of 50759

Natural gas prices jumped above $2.0/MMBtu in August, a level not seen since May, on forecasts for warmer weather and higher air conditioning demand over the next two weeks. Still, worries that Hurricane Isaias would bring in cooler temperatures throughout the Midwest and East Coast limited gains.

The MOEX rose 18 points, or 0.6% to 2,930 on Monday, extending a 1% gain in the previous session, after Health Minister Mikhail Murashko said clinical trials of a coronavirus vaccine candidate from the Moscow-based Gamaleya Institute were complete. Doctors and teachers would be the first to be vaccinated, while mass vaccinations are planned for October. Still, no Russian Phase III trial is included on the World Health Organization's list of vaccine trials around the globe, and concerns about Russia's lack of transparency are being raised.

The IBEX 35 added 99 points, or 1.4% to 6,976 in the first trading day of August, partially recovering from a 5.1% loss in July, after recent data showed Spain's manufacturing sector expanded faster than expected in July. Also, news that Eli Lilly would start a phase 3 trial of its COVID-19 antibody drug helped to boost sentiment. Still, figures from INE showed that the country in June received 97.7% fewer tourists than a year earlier due to the Covid-19.

European stocks rallied on Monday boosted by hopes of a COVID-19 treatment after Eli Lilly said it was beginning a phase 3 trial of its experimental drug to see whether it can prevent the virus' spread in residents and staff in US nursing homes. Earlier, gains were supported by better-than-expected PMI data for the Eurozone, in particular Italy and Spain, two of the most affected countries by the pandemic. Still, investors remain concerned over surging coronavirus infections and the escalation of tensions between US and China as Washington is set to announce new actions related to Chinese software companies in the coming days. Meantime, US lawmakers are still debating a coronavirus-relief package. On the corporate side, HSBC and Societe Generale fell due to weak quarterly reports.

The FTSE MIB gained 288 points, or 1.5% to 19,380 on Monday, rebounding from a 0.7% loss in the previous session, as Markit PMI survey showed that the country's factory activity returned to growth at a stronger than expected pace in July suggesting the sector is on its way to recovery. Also, global market sentiment was supported by hopes of a COVID-19 treatment after US drugmaker Eli Lilly announced it would start a phase 3 trial of its experimental antibody drug.

The FTSE 100 climbed more than 130 points or 2.3% to 6,033 on Monday as US drugmaker Eli Lilly & Co starting a phase 3 trial of potential COVID-19 antibody treatment. Earlier, gains had been supported by PMI data showing the UK manufacturing sector grew the most for over a year in July following the easing of lockdown measures. Still, investors remain concerned about surging COVID-19 cases after tighter restrictions were announced in parts of northern England and some of the country’s reopening measures were postponed. On the corporate front, HSBC shares plunged after it posted a 65% drop in first-half profit and warned of soaring potential loan losses due to the coronavirus crisis. Investors will also be waiting for the Bank of England's monetary policy meeting later this week.

The CAC 40 climbed 99 points, or 2.1% to 4,882 on Monday, recovering from a 1.4% loss in the previous session, as the final PMI reading showed France’s factory activity unexpectedly improved for a second month in July. Also, reports that Eli Lilly would start a phase 3 trial of its COVID-19 experimental antibody treatment supported sentiment. Still, the banking sector was under pressure after Societe Generale posted a surprise net loss of €1.26 billion in Q2, missing analyst expectations on the back of increased loan loss provisions due to the coronavirus pandemic.

WTI crude futures jumped as much as 2% to $41.1 per barrel in afternoon trading as the possibility of new antibody treatment for COVID-19 offset oversupply concerns. OPEC and its allies are due to start reducing production cuts this month while US shale producers are seen boosting output in coming weeks due to a recovery in oil prices. At the same time, a spike in coronavirus cases worldwide could hamper the global economic recovery and fuel demand, with countries such as Australia and the Philippines announcing a reversal of the latest reopening efforts. Brent crude futures were also higher at $44.2 a barrel.

The Davivienda Colombia Manufacturing PMI dropped to 54.2 in July of 2020 from 54.7 in the previous month, but still signaled further improvement in the health of the manufacturing sector. Both output and new orders strengthened for the second month running and purchasing activity increased, as the economy continued to reopen. However, workforce numbers were cut for the fourth straight month, amid efforts to reduce excess capacity. Also, the outlook for future activity worsened for the first time in three months amid worries over the ongoing growth in virus cases and a possible return to lockdown. On the price front, both input prices and output charges remained sharp.

Turkey's lira hovered around 7.0 against the USD, its weakest level since May 12th, amid worries that the country has been depleting its foreign exchange reserves to support the lira and the economic recovery and as traders believe that the CBRT and state banks have reached their limit in terms of capacity to intervene. Last week, data showed that the country's net foreign reserves touched the lowest since mid-May. The lira was also hit by concerns over climbing inflation after the central bank revised its end-2020 inflation forecast to 8.9% from 7.4% projected in April. High external payment obligations, rising current account deficit and negative real rates also worried investors.

The IHS Markit Mexico Manufacturing PMI increased to 40.4 in July 2020 from 38.6 in the previous month. Still, the latest reading pointed to the fifth successive contraction in factory activity as many businesses remained closed due to the COVID-19 pandemic. Output, new orders and export sales continued to drop while the job shedding rate slowed to a four-month low. Vendor performance fell markedly albeit to a lesser extent than in the previous three months. On the price front, input prices were broadly unchanged, after declining for three consecutive months while output charges went down at the softest pace since March. Finally, sentiment remained negative amid fears over a prolonged economic downturn.

The unemployment rate in the Czech Republic rose marginally to 3.8 percent in July of 2020 from 3.7 percent in the previous month. It was the highest jobless rate since January of 2018, amid the lingering effects of the global pandemic. The number of unemployed increased by 9.2 thousand from a month earlier to 279 thousand. A year ago, the jobless rate was lower at 2.7 percent.