LONDON (Reuters) – Global stocks hit two-week lows and oil fell nearly 2% on Monday, as the relentless spread of the coronavirus curbed optimism in the global economy, prompting investors to take refuge in bond stocks. refuge and gold.
FILE PHOTO: A man wearing a protective face mask, after the outbreak of coronavirus disease (COVID-19), walks in front of a stock listing table outside a brokerage in Tokyo, Japan, May 18, 2020 REUTERS / Kim Kyung-Hoon
European stocks opened slightly lower, after Asian stocks ended in the red, catching up on the ugly closing of Wall Street on Friday, when some US states reconsidered their reopening plans.
The global number of COVID-19 deaths reached half a million people on Sunday, with a quarter of those in the United States, where cases have increased in a handful of southern and western states.
MSCI’s global stock index fell 0.2%, reaching its lowest level since June 15 dragged down by Japan’s Nikkei, which lost 2.2% and Chinese blue chips 0.9%. E-Mini futures for the S&P 500 rose 0.1%.
“The market is caught in a real battle between optimism of recovery and news of increasing cases in certain geographic areas such as the United States,” said John Woolfitt, director of operations at Atlantic Capital Markets.
“I think this battle will continue until the US handles.”
Sovereign bonds benefited from the security switch with 10-year US bond yields near 0.64%, having briefly reached 0.96% in early June. Yields on German government bonds clung to one-month lows on Monday.
The US dollar has generally gone in the opposite direction, rising to 97,334 against a basket of currencies from a low of 95,714 earlier in the month.
It had less luck on Monday, falling back to 107.18 yen, although it remained within the recent range of 106.06 to 107.63. The euro stood at $ 1.1245 having found a solid support around $ 1.1167. [USD/]
“Financial markets remain extremely fragile, having to weigh worsening virus news against improving economic data,” said Marija Veitmane, senior strategist at State Street Global Markets.
It’s an important week for US data with the ISM manufacturing index on Wednesday and payrolls on Thursday, before the Independence Day holiday. Federal Reserve Chairman Jerome Powell will also testify Tuesday.
“The US economic data will reinforce that the economy is going through the worst of the recession in our opinion,” said CBA currency analyst Joseph Capurso.
“But a double-dip recession is possible if widespread restrictions are re-imposed, leading to a rise in the dollar.”
In the commodity markets, gold remained near its highest level since early 2012 at $ 1,773 an ounce. [GOL/]
Oil prices fell amid concerns that the pandemic would delay the reopening of some economies and thus hurt fuel demand. [O/R]
Brent crude futures fell 69 cents to $ 40.33 a barrel, while US crude lost 62 cents to $ 37.87.
Chart: Asian stock markets here
Chart: Asia-Pacific valuations here
Thyagaraju Adinarayan reports in London, additional Wayne Cole reports in Sydney
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