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GLOBAL MARKETS-Caution reigns in wake of Nasdaq bounce, euro drifts higher ahead of ECB meeting

Published 09/10/2020, 02:13 PM
Updated 09/10/2020, 02:20 PM
© Reuters.
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* Small gains in Asia stocks after Nasdaq jumped 2.7%
overnight
* Currency markets await ECB
* Oil prices back under pressure amid demand fears
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook
SINGAPORE, Sept 10 (Reuters) - Stock markets rose on
Thursday, but without the spring of Wall Street's tech rebound
as Asia's investors trod carefully, while the euro crept higher
as currency traders stood by for a crucial European Central Bank
meeting later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS snapped its longest losing streak since February
with a 0.7% gain. Japan's Nikkei .N225 rose 0.9% and Chinese
blue chips .CSI300 rose 0.8%.
Markets in Sydney .AXJO and Hong Kong .HSI were just
better than flat and, in a sobering reminder of the risks,
Jakarta .JKSE nosedived 5% on plans to re-introduce COVID-19
social restrictions in the Indonesian capital. "They're half-hearted moves in Asia ... nothing that smacks
of conviction really," said Mizuho Bank's head of economics and
strategy in Singapore, Vishnu Varathan.
"There are some questions about what exactly triggered this
turnaround (on Wall Street). It wasn't as if the sun came poking
out and it's all blue skies."
Futures traded either side of steady, with Euro STOXX 50
futures STXEc1 last up 0.3% and FTSE futures FFIc1 down
0.2%, while futures for the S&P 500 ESc1 rose 0.1% and Nasdaq
100 NQc1 futures were up 0.4%.
Varathan said investors were grappling with whether this
month's U.S. tech selloff was really done, and beyond that an
increasingly uncertain U.S. political outlook and persistent
Sino-U.S. tensions.
Fuel demand fears also had oil prices back under pressure,
in an indication of wavering confidence in global growth. O/R
Brent crude futures LCOc1 fell a fraction to $40.77 a
barrel after bouncing back from a three-month low overnight.
U.S. crude futures CLc1 slipped 0.2% to $37.99 a barrel.
Bond buyers also returned after a tepid response to a $35
billion U.S. 10-year auction overnight, pushing the yield on
U.S. 10-year debt down by a whisker to 0.6968%. US/

EURO WAITS FOR ECB
Currency markets were mostly steady through the Asia session
as investors look to the ECB policy statement due at 1145 GMT
and a subsequent news conference from 1230 GMT. Earlier concerns that the bank may turn dovish, or sound
worried about the euro's rise, have started to give way to an
expectation it might be more upbeat about the economic outlook.
Bloomberg News reported on Wednesday that the ECB might
leave its economic projections broadly steady - not exactly
bullish, but enough to leave the euro EUR= drifting higher to
$1.1821 in Asia.
"The risk now is that the euro could lift after the ECB
meeting, if that is the case and there is more confidence," said
Commonwealth Bank of Australia currency analyst Kim Mundy,
something that would pull other currencies higher with it.
The pound GBP= was on a knife-edge ahead of emergency
talks between Britain and the European Union on Thursday after a
British proposal to ignore parts of the Brexit divorce pact
threw trade negotiations into turmoil. Sterling last sat at $1.3006 and 90.91 pence per euro
EURGBP= .
U.S. jobless claims figures are also due at 1230 GMT and
investors are also intently focused on whether the U.S. stock
market bounce can actually hold firm.
Wednesday's Nasdaq rebound has recouped about a quarter of
the index's losses since it plunged from a record high on Sept.
2, but it has also highlighted how stretched some stocks are.
"It's too soon to say whether the rout is over, or whether
last night's recovery is simply a pause," ANZ analysts said in a
note on Thursday.
Gold XAU= was steady at $1,947 an ounce. GOL/

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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