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Good morning. There was a symbolic moment in U.S.-China tensions, Spain is again the focus of Europe's coronavirus crisis and a technology firm plans to cash in on one of its units. Here's what's moving markets.

U.S. Flag Lowered  

The U.S. lowered its flag over the American consulate in the Chinese city of Chengdu, the latest historic milestone marking the deterioration in relations between Washington and Beijing. The move came less than three days after the U.S. government forced their Chinese counterparts out of their mission in Houston, with hundreds of people gathering outside the building in Chengdu on Saturday as American employees prepared to leave. The consulate closures are the most tangible casualties of one of the worst disputes between the U.S. and China since two sides formally established relations in 1979.

Spain Scrambles

Spain is scrambling to stay ahead of new outbreaks of the coronavirus that prompted the U.K. to impose a quarantine on travelers returning from the country, an order attacked by both the Spanish government and two leading British airlines. Britain itself, meanwhile, announced it would pause reporting on Covid-19 deaths while it reviews how they are calculated. In Asia, China had the most domestic cases since mid-March amid flareups in the west and northeast, while Hong Kong will ban all dine-in services at restaurants and require masks outdoors from Wednesday, local Cable TV reported this morning. Here's a reminder of how the illness is transmitted

SAP's Plans

Europe's largest technology company, SAP SE, is selling a stake in its Qualtrics customer-survey software unit through a U.S. public offering, less than two years after buying the firm to help compete with Salesforce Inc. Qualtrics' market value could be from 10 to 16 billion euros if it lists, helping SAP reduce debt, Bloomberg Intelligence analysts wrote in a note. Qualtrics founder Ryan Smith, who started the firm with brother Jared in the basement of their parents' home in Utah, will be the largest individual shareholder.

Stocks Edge Up

European and U.S. stock futures are edging higher after last week's declines despite the latest on U.S.-China tensions, while the dollar index ticked down to touch the lowest level in more than a year. Billionaire investor Ray Dalio warned that the conflict could expand into a "capital war" and harm the U.S. currency. Elsewhere, spot gold climbed to an all-time high, possibly reflecting the current troubles of the global economy, while crude oil futures trimmed early losses.

Coming Up...

Airline Ryanair Holdings Plc predicted it will continue losing money through the summer as it kicked off a busy earnings week, while telecommunications group Koninklijke KPN N.V. and luxury giant LVMH are due to update later. In data, there's a German Ifo business survey and U.S. durable goods numbers after China industrial profits statistics showed continued improvement in June, with returns at industrial firms growing for the second month in a row. Here's a roundup of some key macroeconomic events to watch out for in the coming days.

What We've Been Reading

This is what's caught our eye over the weekend. 

And finally, here's what Cormac Mullen is interested in this morning

Asset managers have never been more bullish about prospects for the euro. Net-long positions in the common currency held by institutional investors have surged to a record high, according to the latest Commodity Futures Trading Commission data. And its hard to fault their enthusiasm -- the euro is up over 4% against the dollar this month in the aftermath of the historic agreement on a rescue package for the bloc and the slide in the greenback which continued early Monday. But there are a few signs for caution. Technicals suggest the shared currency has climbed into overbought territory, at least according to its 14-day relative strength index -- a gauge of momentum. Hedge fund bullish bets are also not far off record highs, implying euro strength has fast become a consensus trade. And while high-frequency economic data shows Europe in a better position now than the U.S. and other peers, renewed coronavirus outbreaks in Spain and Germany should remind us it is still early in the recovery process and things can quickly turn. The rescue deal was indeed an important milestone that should give comfort to investors in Europe. But it's behind us now and traders may need some fresher catalysts to keep the euro bull run going.

Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo.

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