* World stocks pause ahead of EU meeting
* Oil rebound continues, Brent crude up 5%
* Asian shares slightly higher on Wall Street read-across
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Thyagaraju Adinarayan
LONDON, April 23 (Reuters) - World stocks inched up on
Thursday on hopes for a massive joint stimulus fund to support
the European Union during the coronavirus crisis and on an
ongoing rebound in oil prices, while investors brushed off a
slew of awful economic data.
European stocks .STOXX and U.S. stock futures ESc1 were
trading marginally higher as an internal EU note showed the
bloc's commission was considering a plan worth 2 trillion euros
($2.2 trillion) to tackle a deep recession.
With all eyes glued on an EU meeting later in the day to
discuss the measures, investors swept aside horrible data from
the euro zone that showed economies have suffered massive blows
from the coronavirus outbreak and measures to contain it.
The euro EUR= hit a one-month low, but the safe-haven
dollar =USD gained against major currencies.
The EU meeting comes a day after the U.S. Congress looked on
course to approve nearly $500 billion more in coronavirus aid,
taking the world's biggest economy's overall stimulus packages
to nearly $3 trillion.
"(The) EU Council meeting will be closely watched to see how
quickly EU policy makers will move towards area-wide fiscal
risk-sharing," said George Cole, an economist at Goldman Sachs.
"We expect the discussions to fall short of a full commitment to
mutualise risks from the COVID-19 shock."
Pressure for action has grown, and on Thursday IHS Markit's
Flash Composite Purchasing Managers' Index (PMI) for the bloc,
seen as a good gauge of economic health, sank to by far its
lowest reading since the survey began in mid-1998.
"The services sector, which accounts for approximately 75%
of the eurozone economy, continues to be the worst hit by the
drastic lockdown measures," said Ambrose Crofton, Global Market
Strategist at J.P. Morgan Asset Management.
In the UK, PMIs fell to a new record low in March - and far
below even the weakest forecast in a Reuters poll of economists.
Stocks and other risky assets barely acknowledged the
numbers, though, since they were mostly backward-looking data.
It was the EU meeting and the outcome that weighed on markets.
Italian two-year government bond yields fell 10 bps to 0.96%
IT2YT=RR . Ten-year yields were down by the same amount at
2.05% IT10YT=RR .
The silver lining in macroeconomic news overnight was the
European Central Bank's decision to let banks post collateral
that was downgraded to junk during the coronavirus outbreak to
prevent a credit squeeze in the euro zone. That pushed down the
cost of insuring exposure to a basket of sub-investment grade
European companies. Asia was still riding the recovery in crude oil prices.
MSCI's broadest index of Asia Pacific shares outside of Japan
.MIAPJ0000PUS rebounded from two-week lows to be up 0.4%
following an overnight lead from Wall Street.
MSCI's index of emerging market stocks .MSCIEF rose about
0.5% amid increased speculation over global stimulus measures,
while a recovery in the oil market also brewed some optimism.
Brent oil LCOc1 extended gains on Thursday to rise 7% to
$21.77 a barrel on the prospects for further production cuts to
reduce the glut in the oil market. U.S. crude CLc1 gained 12%
to $15.42.
The dollar, though broadly strong, slipped against the
currencies of oil-producing states, giving up earlier gains as
the recovery in crude prices helped to soothe markets.
The dollar fell 1% RUB= against the Russian rouble and
0.8% against the Mexican peso MXN=D3 , retreating from a
two-week high earlier in the session.
($1 = 0.9280 euros)
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