GLOBAL MARKETS-European shares pick up, dollar gains before quarter-end

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Reuters Live Markets blog on European and UK stock
markets:
LIVE/

(Updates prices throughout, adds commentary and chart)
By Elizabeth Howcroft
LONDON, June 30 (Reuters) - European shares picked up on
Tuesday after a weak start, extending the optimism of the Asian
session, and oil prices steadied as investors looked for signs
of an economic recovery in the second half of 2020.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up about 0.1% at 1056 GMT, after
Asian shares rose on strong data from the U.S. housing market
and Chinese factories. European shares continued the rally.
World shares are down around 8% so far this year, having
slumped 35% between Feb. 20 and March 23 in the most destructive
sell-off since the Great Depression. But the world equity index
is up 17.5% this quarter - on track for its biggest quarterly
gain since the second quarter of 2009. Rising COVID-19 cases continue to show signs of a second
deadly wave of the pandemic, but markets still expect a global
economic recovery with lockdown measures easing.
Los Angeles has become a new epicentre in the pandemic as
coronavirus cases and hospitalisations surge there despite
California Governor Gavin Newsom's orders requiring bars to
close and residents to wear masks in nearly all public spaces.
The World Health Organization (WHO) will "read carefully" a
Chinese study on a new flu virus found in pigs, a spokesman
said, adding that the findings underscored the importance of
influenza surveillance during the current pandemic. "Asset markets are looking beyond COVID stats," said Neil
Jones, head of FX sales at Mizuho Bank. "There's some
expectation of containment and then, further down the line, an
expectation of some form of measure to combat the virus."
U.S. Federal Reserve Chair Jerome Powell said on Monday the
outlook for the world's biggest economy was "extraordinarily
uncertain". European shares edged up, with the Euro STOXX 600 up 0.1% at
1102 GMT having been relatively range-bound for the past two
weeks .STOXX . Germany's DAX was up 0.3% .GDAXI . London's FTSE 100 was down 0.6% .FTSE . Britain's economy
shrank by the most since 1979 in early 2020 as households
slashed their spending, according to official data that included
the first few days of the lockdown.
Supported by end-of-quarter flows, the dollar rose to 97.722
against a basket of currencies, up 0.3% on the day =USD .
"I would expect overall dollar demand to continue as we go
into July," Mizuho's Neil Jones said.
"If there's a summer lull then we may see a dollar sell-off
into the elections but as we run up to the end of the year I
would expect to see a resurgence of dollar demand," he added.
The euro was down around 0.3% against the dollar, at $1.1208
EUR=EBS , while the Australian and New Zealand dollars also
edged down AUD=D3 NZD=D3 .
Oil prices slipped as traders took profits after sharp gains
the previous session and Libya's state oil company flagged
progress in talks to resume exports, potentially boosting
supply. Prices then recovered partially. U.S. crude CLc1 was down 0.6% at $39.15 a barrel, having
hit as low as $39.00, while Brent crude LCOc1 slipped 0.6% to
$41.16 per barrel. O/R
China's parliament passed national security legislation for
Hong Kong in response to last year's pro-democracy protests. The
United States, Britain and other Western governments have said
the legislation erodes the autonomy the city was granted at its
1997 handover. Market reaction was limited. Demand for safe German debt was little changed, with the
10-year government Bund yield at -0.478% DE10YT=RR .
Annual inflation in the 19 countries sharing the euro
accelerated to 0.3% in June from a four-year low of 0.1% in May,
beating forecasts for no change and supporting the European
Central Bank's expectation that a negative reading may be
avoided. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Emerging markets http://tmsnrt.rs/2ihRugV
World financial markets in 2020 https://tmsnrt.rs/2BmerLo
Global markets and the tale of two quarters https://tmsnrt.rs/381pBBe
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