European stocks look set to open broadly lower on Monday as investors look for direction in the face of pandemic and inflation uncertainties.

China is coming under increasing pressure over probe into the origins of the COVID-19, with former U.S. Secretary of State Mike Pompeo revealing that the Wuhan Institute of Virology (WIV) was engaged in military activity apart from its civilian research.

British intelligence agencies now believe it is ‘feasible’ that the COVID-19 pandemic began with a coronavirus leak from a Chinese laboratory.

Separate reports out of China showed a slight slowdown in factory activity on slower demand and higher raw material prices, but a pick-up in the giant service sector. Japan reported weaker-than-expect growth in factory output.

A rapidly rising yuan also drew increased scrutiny in global financial markets, with two state-run newspapers flagging risks fueled by rapid gains in the currency.

The U.S. dollar held near a two-month high against the Japanese yen after a key measure of inflation showed stronger price gains than expected.

Gold edged up slightly and was heading for its best monthly jump since July 2020 amid inflation fears while oil eked out modest gains on expectations of improved demand growth for fuel in the next quarter.

Bitcoin traded around $35,000 after a Friday slump as Bank of Japan Governor Haruhiko Kuroda warned about the token’s recent volatility and speculative trading.

U.S. stocks saw modest gains on Friday as President Joe Biden’s budget revealed a blueprint for addressing long-standing inequities in the U.S. economy and an inflation reading preferred by the Federal Reserve showed an acceleration in the pace of price growth but not as much as traders had feared.

The Dow edged up 0.2 percent, while the S&P 500 and the tech-heavy Nasdaq Composite both inched up around 0.1 percent.

European stocks also ended in positive territory on Friday on the back of upbeat U.S. economic data and prospects of additional fiscal stimulus.

The pan European Stoxx 600 rose 0.6 percent. The German DAX and France’s CAC 40 index both gained around 0.7 percent while the U.K.’s FTSE 100 ended flat with a positive bias.

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