Stock markets edged higher, European bond yields dropped and the dollar remained firm in light trading on Monday amid warnings from the International Monetary Fund's managing director that a third of the world will fall into recession in 2023.
However, traders were reticent to trust early-year starts in stock and bond moves with many markets closed for a holiday and ahead of a host of economic numbers due this week. Buoyant stock prices in Europe might be due, he said, to survey results published on Monday, which pointed towards a rebound in optimism among euro zone factory managers.
"There is an attempt by the dollar index to pull higher today but we do see that it is losing a good part of the strength it gained last year," said Ulrich Leuchtmann, head of forex research at Commerzbank. German government bond yields on Monday tumbled from their highest levels in more than a decade amid more hawkish signals from the European Central Bank .