GLOBAL MARKETS-World shares look past lockdowns as U.S. election approaches

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* MSCI World index up 0.2%, Brent crude down 3%
* Attention turning to U.S. elections on Tuesday

By Danilo Masoni and Swati Pandey
MILAN/SYDNEY, Nov 2 (Reuters) - World shares recovered from
one-month lows on Monday as upbeat Chinese data offset new
lockdowns in Europe, while investors prepared for more
volatility arising from the U.S. presidential election.
MSCI world equity index .MIWD00000PUS , which tracks shares
in 49 countries, rose 0.2% by 0858 GMT, following a strong
performance in Asia after data showed Chinese factory activity
expanded at its fastest pace in a decade.
Europe was off to a more cautious start after the UK became
the latest country in the region to announce a fresh lockdown as
a second wave of COVID-19 infections threatened to overwhelm its
health service.
In the euro zone, Italy was also set to approve new
restrictions as early as Monday after moves in France and
Germany last week caused a broad risk-off move across markets.
The FTSEurofirst 300 .FTEU3 benchmark fell early but
managed to find some footing as investors bet the lockdowns
wouldn't last as long as the previous round. The index, which
reached a five-month low last week, was last up 0.2%.
"Europe is facing up to a harsh winter ahead," Deutsche Bank
strategist Jim Reid said in a note. "The question to be asked to
all the European countries is can they come out of these
measures in some form towards the end of November/early December
as is hoped or will they be extended further."
The focus was increasingly shifting towards the U.S.
election on Tuesday. Republican President Donald Trump trails
Democratic challenger Joe Biden in national opinion polls, but
polls in the states that will decide the election show a closer
race.
"Given the likelihood that the outcome of the presidential
election will be unclear on Wednesday, and possibly for much
longer, volatility could easily pick up and it might become a
severe roller-coaster ride," UniCredit strategists said.
Analysts are concerned that an uncertain outcome could cloud
the prospects for fiscal stimulus in the world's largest
economy. Also crucial for the size of a possible stimulus will
be which party wins the Senate.
The VIX volatility index .VIX , which rose to its highest
in four months last week, was up nearly 1 point at 38.4. U.S.
stock index futures ESc1 NQc1 were up 0.4% to 0.5%,
suggesting mild gains on Wall Street at the open.
Meantime, the fresh lockdowns in Europe and parts of the
United States have raised concern over the outlook for fuel
consumption. Brent crude LCOc1 prices fell to a low of $35.74
per barrel, a level not seen since late May. It was last down
3.1% at $36.81. U.S. crude went as low as $33.64. O/R
Global coronavirus cases surpassed 500,000 last week with
Europe crossing the bleak milestone of 10 million total
infections. The UK is grappling with more than 20,000 new cases
a day while a record surge in U.S. cases is killing up to 1,000
people a day. In currencies, the risk-sensitive Australian dollar AUD=D3
slipped 0.4% to go below 70 U.S. cents for the first time since
July. It was last at $0.6999.
The Japanese yen JPY= was higher at 104.73 per dollar. The
British pound GBP= was last 0.7% lower at $1.2858. The euro
EUR= slipped to $1.1627.
That left the index that measures the dollar against a
basket of other currencies, up at 94.22. =USD .
A risk-on revival after the U.S. election could see the
dollar resume its slide from March's highs, analysts said.
JPMorgan said the market probably views a Biden win as
"short-term neutral" but "long-term negative" as his expected
tax policy outweighs the benefits from a large stimulus package.