(Adds U.S. market open)
* J&J falls as vaccine disappoints
* Bitcoin jumps 14% after Elon Musk mention
* Treasury yields rise after inflation data
By Herbert Lash and Carolyn Cohn
NEW YORK/LONDON, Jan 29 (Reuters) - The dollar and a gauge
of global equity markets fell on Friday as a battle on Wall
Street between hedge funds and retail investors and a row over
COVID-19 vaccine supply in Europe cooled risk appetite.
Disappointing vaccine data from Johnson & Johnson JNJ.N
also hurt sentiment but the focus remained on the assault of
retail traders using online forums to force hedge funds to
reverse short positions - their bets that stocks will fall.
Shares of GameStop Corp GME.N , AMC Entertainment Holdings
Inc AMC.N and BlackBerry Ltd BB.N surged after Robinhood and
Interactive Brokers said they planned to ease restrictions after
imposing buying halts on Thursday. The trading frenzy comes after central bank and government
stimulus have propelled stock markets to record highs in recent
weeks, encouraging the entry of a wave of retail investors who
have pushed trading volumes to new heights.
"There's fear in terms of the volatility," said Derek
Halpenny, head of research for global markets at MUFG. "Specific
trades in pockets of the market can spread into the broader
market."
"Any hedge fund will be carefully looking at all their
shorts after this week and regulators will look very carefully
at collective retail trading," Deutsche Bank analysts said.
MSCI's benchmark for global equity markets .MIWD00000PUS
fell 1.23% to 646.48, while Europe's broad FTSEurofirst 300
index .FTEU3 dropped 1.59% to 1,529.7.
On Wall Street, the Dow Jones Industrial Average .DJI fell
1.16%, the S&P 500 .SPX lost 1.10% and the Nasdaq Composite
.IXIC dropped 1.11%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 1.1% to post a weekly loss of 4.4%. Japan's
Nikkei .N225 fell 1.9%, recording its first weekly loss of the
year.
VACCINE DISPUTE
Delays in COVID-19 vaccine production have snowballed into a
spat between Britain, the European Union and drugmakers over how
best to direct limited supplies. AstraZeneca AZN.L offered eight million more doses of its
COVID-19 vaccine to the European Union after it unexpectedly
announced cuts in supplies last week. But the bloc said that was
far short of what was originally promised, an EU official told
Reuters on Friday. New variants of the novel coronavirus have also prolonged
lockdowns and delayed expectations of an economic rebound.
Click here http://tmsnrt.rs/2EmTD6j for an interactive chart
on the vaccine race.
The U.S. dollar retreated from its highest level since
mid-November against the yen JPY= as investors rebalanced
portfolios for month-end. The greenback slid 0.45% and was
slightly lower against an index of currencies =USD , falling
0.052%.
Bitcoin BTC=BTSP jumped as much as 14% to a two-week high
after Tesla Inc TSLA.O chief Elon Musk tagged the
cryptocurrency in his Twitter biography. French 10-year government bond yields FR10YT=RR , which
move inversely to price, rose four basis points after France's
gross domestic product contracted less than expected in the
fourth quarter of 2020.
U.S. Treasury yields rose on Friday, in line with Europe,
after data showed inflation perked up last month, while
employment costs rose, suggesting the world's largest economy is
on the mend from the devastating effects of the pandemic.
The U.S. yield curve steepened as a result of the increase
in long yields, with the spread between 2-year and 10-year notes
hitting 98.20 basis points US2US10=TWEB , the widest in about a
week.
The 10-year U.S. Treasury US10YT=RR note rose 3.8 basis
points to yield 1.0808%.
Oil prices edged up as demand concerns caused by new
coronavirus variants and slow vaccine rollouts offset a cut in
Saudi Arabian oil supply and falling U.S. oil inventories.
Brent crude futures LCOc1 rose $0.37, to $55.9 a barrel.
U.S. crude futures CLc1 gained $0.09, to $52.43 a barrel.
Spot gold prices XAU= rose 0.90% to $1,856.91 an ounce.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
Hedge funds scrambling to exit shorts, cut losses https://tmsnrt.rs/3prlMgN
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>