European stocks are set to start the month higher Monday as investors weighed growth data from China.

Chinese stocks were mixed in early Asia trade, as signs of a Covid-19 resurgence in some areas of the country weigh on investor sentiment, IG said.

A private gauge of China’s manufacturing activity in July fell to a post-Covid-19 low as heavy floods, a resurgence in Covid cases and power shortages in some cities weighed on output and new orders.

The Caixin China purchasing managers index dropped to 50.3 in July from 51.3 in June, Caixin Media Co. and researcher Markit said Monday. July’s reading was the lowest in the past 16 months, but still held above the 50 mark that separates expansion from contraction.

The result points in the same direction as a competing official gauge that tracks large state factories more closely. The reading for July was 50.4 versus 50.9 in June, China’s statistics bureau said Saturday. The official survey of manufacturers has a much larger sample than the Caixin survey.

A monthslong rally in U.S. stocks has slowed down in recent weeks on worries about the outlook for the economy, which some investors worry may stumble as coronavirus case counts rise again. Lingering concerns over China’s clampdown on its internet and technology businesses, as well as lofty expectations for corporate earnings, also weighed on sentiment this week.

Amazon.com’s disappointing sales report late Thursday and weaker outlook rattled Wall Street further, investors say.

“There are so many crosscurrents going on at the moment influencing markets,” said Sebastian Mackay, a multiasset fund manager at Invesco. “We’ve entered a more volatile period for markets, but markets will continue to move higher because we’re still seeing economic growth.”

Bonds:

The 10-year Treasury ended July with the largest decline since March 2020, losing 0.204 percentage point to 1.239%, as investors reevaluate the economic outlook in face of renewed threats from Covid-19’s Delta variant.

The benchmark is down for four consecutive months, shedding more than half of a percentage point in the period. The prospect of extended fiscal stimulus is pared by expected monetary tapering, while new lockdowns can’t be ruled out.

“The toxic mix of supply shortages, demand-sapping price hikes, and virus uncertainty will counter some of the thrust from excess savings, record wealth, and rising employment,” BMO said.

Energy:

Oil fell in morning Asian trade amid concerns over the rising number of Covid-19 Delta cases worldwide. Amid the surge in cases of the highly contagious variant, travel demand is also being hit by lower vaccination rates in places like Indonesia and Thailand, though improving U.S. demand may lend oil prices some support, ANZ said.

Traders were watching OPEC oil supplies closely as quotas rise by another 400 thousand barrels a day in August under the new production agreement, ANZ said.

Metals:

Gold declines in early Asian trade after making some gains last week following the Fed’s dovish tone. U.S. 10-year Treasury yields have continued to trend below 1.30%, which could make gold look more appealing with lower opportunity costs, IG said. The brokerage puts near-term support for gold prices at $1,800 an ounce.

Copper rose in early Asian trade because of signs of strong demand in developed economies, but ANZ said prices could be dragged down due to the selloff in Chinese stock markets spilling over into base metals.

The bank said the regulatory crackdown on China’s technology and education industries is causing investors to dump other risky assets. It noted that this is exacerbated by China selling part of its reserves of metals to increase market supply. The three-month LME copper contract rose 0.2% to $9,748/ton.