Asian stocks fell along with U.S. and European equity futures, paring a sliver of the gains in a record month for global equities driven by optimism that coronavirus vaccines will aid the global economy. Oil retreated.

A gauge of Asian shares dropped the most in a month on Monday, with Japan, South Korea and Hong Kong posting some of the biggest equity-market declines. S&P 500 contracts began the week higher before slipping.

Chinese shares were more resilient as manufacturing sector activity picked up faster than expected in November. The central bank also unexpectedly injected funds into the financial system. China National Offshore Oil Corp. slumped after Reuters reported that it faces a U.S. blacklist.

Oil retreated after an OPEC+ agreement to postpone an output increase planned for January remained elusive before a meeting Monday. A gauge of the dollar extended its recent retreat to the lowest level since April 2018. Gold dropped.

FX Overnight News:

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• Largely positive news surrounding potential vaccines to treat Covid-19 has resulted in strong recent gains in global stock markets. In Europe, the DAX has gained 15% this month, the FTSE 100 is up 14% and the CAC 40 over 20%.
• However, a number of European countries are now facing public disquiet over the restrictions their governments have put in place to try and curb the spread of the Covid-19 virus ahead of the important Christmas period. Without the buy-in of the public, containing the spread will be very difficult.
• Britain and the European Union are heading into a "very significant" week, British foreign minister Dominic Raab said on Sunday, with serious differences over a trade deal yet to be resolved.
• Additionally, Reuters reported that the outgoing Trump administration is set to add China's top chipmaker, SMIC, and its largest offshore oil and gas producer, CNOOC, to a U.S. blacklist, risking a further deterioration in relations between the globe’s two largest economies.

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