In European Equity Markets indices traded lower on Monday as investors questioned the stability of the German government and wider trade links between the European Union and the U.S. The pan-European Stoxx 600 ended 0.76 percent lower with every sector in the red. Basic Resources was the worst performer, down by 2.2 percent. Industrials, Construction, and Travel & Leisure were other big losers. Playtech closed at the bottom of the European benchmark, down by more than 26 percent, due to a profit warning. The Isle of Man-based firm writes software for gambling machines.

In Currency Markets the US dollar started the third quarter on a positive note on Monday, benefiting from mounting global trade tensions, as investors scooped up the greenback as a safe-haven bet. The euro also received a setback after German Chancellor Angela Merkel was dealt a fresh blow when her interior minister offered to quit in an escalating row over migration policy. The euro fell 0.6 percent to $1.1609. It racked up its third consecutive monthly loss against the dollar in June. The dollar extended its gains against the yen to hit a new six-week high of 111.06 yen.

In Commodities Markets oil prices fell on Monday, reversing course from last week as supplies from Saudi Arabia and Russia rose while economic growth stumbled in Asia amid escalating trade disputes with the United States. Global benchmark Brent crude fell $1.31 to $77.92 a barrel, after earlier touching a session low of $77.59. U.S. light crude fell 50 cents to $73.65 a barrel. The premium for U.S. crude for the front month compared with the second month widened to as much as $2.00 a barrel, the most since Aug. 20, 2014.

In US Equity Markets losses in shares of technology and industrial companies dragged indices lower on the first trading day of the second half of this year, as risk of an escalating tariff war between Washington and its trading partners continued to weigh on sentiment. the S&P 500 was down 0.58 percent, at 2,702.61 and the Nasdaq Composite was down 0.57 percent, at 7,467.67. Among the bright spots was Tesla, which jumped 4.4 percent, after the electric car-maker was said it beat its target of producing 5,000 Model 3 sedans per week.

In Bond Markets German 10-year bond yields fell to five-week lows on Monday, pushed down by political uncertainty in Germany, trade war fears and an expectation that the ECB could buy more long-dated bonds from next year to keep euro zone borrowing costs in check. The yield on Germany’s 10-year Bund fell 2 basis points to 0.284 percent, its lowest level in almost five weeks. Most other 10-year euro zone bond yields were flat on the day, though Southern European bond yields edged lower by 3-4 bps towards the end of the session.