GLOBAL MARKETS-Asian markets set to shake off coronavirus spread, U.S.-China tensions

By Pete Schroeder
WASHINGTON, July 14 (Reuters) - Asian markets appeared set
to shake off heightened tensions between the United States and
China and the spread of coronavirus, with stock futures pointing
to early gains on Wednesday.
Australian S&P/ASX 200 futures YAPcm1 rose 0.47% in early
trading, Japan's Nikkei 225 futures NKc1 were up 0.7%, and
Hong Kong's Hang Seng index futures .HSI HSIc1 rose 0.46%.
E-mini futures for the S&P 500 EScv1 rose 0.82%.
The strong signals for Asian markets came after U.S.
investors shook off lingering bad news about the spread
coronavirus to send major indices higher on Tuesday, buoyed by a
rise in cyclical stocks. The Dow Jones Industrial Average .DJI
rose over 2%, while the S&P 500 .SPX gained 1.34% and the
Nasdaq Composite .IXIC climbed 0.94%. The stock surge came after three U.S. states reported new
record daily deaths from the pandemic, and as tensions continued
to grow between the United States and China.
"Markets have shown a remarkable ability to look through
rising infection rates and rising risks of lockdowns," said
Michael McCarthy, chief markets strategist at CMC Markets. "At
the moment, the market seems to be quite lively and happy to
rally on despite those increasing economic risks."
MSCI's gauge of stocks across the globe .MIWD00000PUS
closed up 0.53%.
Simmering tensions between the United States and China also
loom large, after U.S. President Donald Trump signed legislation
and an executive order to hold China "accountable" for the
national security law it imposed on Hong Kong.
New data showed U.S. consumer prices rebounded by the most
in nearly eight years in June, but a resurgence in new COVID-19
cases after the reopening of businesses suggested weak demand
could keep the Federal Reserve injecting money into an ailing
economy. There were still signs of wariness among investors, as
yields on leading U.S. and euro-zone government debt fell and
safe-haven gold prices solidified gains above $1,800 an ounce.
Fed officials warned the U.S. economy faces a longer
recovery from the pandemic, and economic pain could still worsen
as cases mount.
The Bank of Japan is expected to hold steady on policy after
Wednesday meeting, but investors will be gauging officials'
economic projections and any reassurances of additional stimulus
if needed. U.S. gold futures GCcv1 settled mostly unchanged at
$1,813.40. Spot gold XAU= rose $7.1051 to $1,809.81 an ounce.
The 10-year U.S. Treasury note US10YT=RR fell 1.5 basis points
to yield 0.6250%.
Oil prices rose slightly on Tuesday as OPEC and its allies
cut production by more than agreed to in June, although demand
concerns lingered. Brent crude LCOc1 futures settled up 18
cents at $42.90 a barrel. The dollar fell in North American trade on Tuesday as
expectations for inflation picked up slightly and the euro rose
on optimism about the possibility of a European Union stimulus
package.
The Australian dollar AUD= rose 0.13% versus the
greenback.

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