* Europe's STOXX 600 follows Wall Street to record high
* Focus on how fast China companies can go back to work
* Dollar near four-month high over euro on US economy
performance
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, Feb 11 (Reuters) - World stocks resumed rising
towards record highs on Tuesday and the dollar reached a
four-month high as China's top medical advisor said the
coronavirus epidemic may plateau in the next few weeks.
China's factories were struggling to re-open after an
extended break and analysts warned that investors might be
underestimating the economic damage, but the mood remained
strong after another Wall Street surge overnight.
The death toll in mainland China climbed past 1,000 on
Tuesday, but the number of new confirmed cases fell.
Zhong Nanshan, an epidemiologist who helped fight
the SARS epidemic in 2003, said the situation in some provinces
was already improving. "The peak time may be reached at ... maybe middle or late
this month," Zhong told Reuters.
The pan-European STOXX 600 index .STOXX rose as much as
0.7% to a record high of 427.46 points. Basic resources stocks
.SXPP led the gains, rising 1.7%, as commodity prices
recovered from the slowdown in Chinese consumption of raw metals
and energy. O/R
"There are some hopes that the peak of virus may be on the
horizon, but we are still quite cautious," said TD Securities'
European Head of Currency Strategy Ned Rumpeltin. "We are still
pretty far from the all clear ... and we just don't know what
the macroeconomic impacts are going to be."
In China, factories were slow to reopen after an extended
Lunar New Year break, leading analysts at JPMorgan to again
downgrade forecasts for growth this quarter.
"The coronavirus outbreak completely changed the dynamics of
the Chinese economy," they said in a note.
They assumed the contagion would peak in March and factories
would slowly resume opening this month. In that case, growth
would slow to around a 1% annualised pace in the first quarter,
before rebounding to 9.3% in the second.
Should the contagion not peak until April, the economy could
contract in the first quarter, with a rebound spread over the
second and third quarters, the JPMorgan analysts said.
Even so, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS rose 0.9%, with Shanghai blue
chips .CSI300 ahead by 0.8%.
Japan's Nikkei .N225 was closed for a holiday, although
Nikkei futures NKc1 traded up 0.8%.
FED AHEAD
Markets are now pricing in almost 40 basis points of rate
cuts this year by the Federal Reserve to cope with coronavirus
damage. The Treasury yield curve slightly inverted to reflect
the danger of recession. US/
Fed Chair Jerome Powell appears before Congress on Tuesday
to begin two days of testimony. He's expected to reiterate that
the U.S. economy is doing well but that rates can stay low given
the current low inflation environment.
The relative outperformance of the U.S. economy is keeping
the dollar well-supported, with the euro slipping to a
four-month low at $1.0910 EUR= . The British pound GBP= was
last at $1.2906 having touched a two-month trough of $1.2870.
Against a basket of currencies, the dollar was at its
highest since mid-October at 98.858 .DXY and heading for its
sixth day of gains in the last seven against the Japanese yen,
which benefits from being a safe haven of its own. JPY= .
USD/
Risk aversion initially helped lift gold to its highest for
a week, but the strength of the dollar pulled it back 0.25% to
$1,568.61 per ounce XAU= . GOL/
Oil prices rose after weeks of decline as traders waited to
see how demand in China might fare and whether OPEC could agree
to trim supplies. O/R
Brent crude LCOc1 futures gained 64 cents to $53.91 a
barrel. U.S. crude CLc1 rose 50 cents to $50.07.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
World FX rates in 2020 http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>