(Refiles to alter description of State Street strategist in
fifth paragraph.)
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVhFor
Reuters Live Markets blog on European and UK stock markets,
please click on: LIVE/
By Elizabeth Howcroft
LONDON, June 26 (Reuters) - Markets showed signs of optimism
on Friday, with European shares gaining for a second consecutive
day, oil prices rising and the dollar falling, despite a record
number of new COVID-19 infections in the United States.
Coronavirus cases rose across the United States by at least
39,818 on Thursday, the largest one-day increase yet. The
governor of Texas temporarily halted the state's reopening on
Thursday as infections and hospitalisations surged. European shares were undeterred, with the Stoxx 600 up
1.2% at 1030 GMT, erasing some losses from earlier in the week
.STOXX . The index is set to end the week down 0.5%, its
smallest weekly change in five months. London's
FTSE 100 was up around 1.5% .FTSE .
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.4%, extending gains from late
on Thursday.
"Even though we continue to see some pretty scary virus
numbers coming out of the U.S., it's not really dented sentiment
– not to any sustained degree at least," said Timothy Graf, head
of macro strategy for EMEA at State Street Global Markets.
Graf said that recent downward corrections of market
optimism have had little follow-through.
The possibility of a second coronavirus wave and renewed
lockdowns has limited market impact because if lockdown measures
resume then markets expect this to raise the likelihood of more
fiscal support for economies, he said.
"There is a disconnect between what you feel should be the
case looking at virus numbers and equities and riskier
currencies holding up relatively well and volatility receding,
but at the same time we've never seen a policy response like
this, not in the last 80 years at least," Graf said.
Having risen between 0500 and 0700 GMT, the dollar fell in
London, reaching 97.325 against a basket of currencies by 1030
GMT and on track to end the week down around 0.4% =USD .
The riskier New Zealand dollar was up 0.2% NZD=D3 , having
spent most of June unchanged from its level before the
coronavirus crisis for markets peaked in March.
The euro gained versus the U.S. dollar and is on track for
its biggest weekly rise in three weeks after the European
Central Bank reaffirmed its dovish stance in the minutes of its
policy meeting. The euro zone is "probably past" the worst of the economic
crisis caused by the pandemic, European Central Bank President
Christine Lagarde said on Friday, while urging authorities to
prepare for a possible second wave. Oil prices also rose, extending gains on optimism about a
recovery in fuel demand worldwide, despite signs of a revival in
U.S. crude production. U.S. West Texas Intermediate crude CLc1 futures gained 20
cents, or 0.5%, to $38.92. Brent crude LCOc1 futures rose 31
cents, or 0.8%, to $41.36.
Demand for safe euro zone government debt was little
changed, with Germany's 10-year Bund yield edging up from recent
one-month lows at -0.464% DE10YT=RR .
The yield on benchmark 10-year Treasuries US10YT=RR was
steady at 0.6725%. Gold XAU= edged up slightly to $1,763.65 an
ounce. US/ GOL/
S&P 500 futures pointed to a slightly bullish U.S. stock
market open, up 1% ESc1 .
Investors have poured $2.6 billion into Treasury
inflation-protected securities (TIPS) in the week to Wednesday,
Bank of America said, the largest amount ever. Credit Suisse changed its position on global equities to
"neutral", from "overweight", saying that it was taking profits
after the recent rally, but kept its overweight positions in
credit markets.
"The upcoming earnings season, a recent uptick in
coronavirus infection numbers and political developments in the
USA create a challenging backdrop for financial markets going
into the summer," said Michael Strobaek, Credit Suisse's chief
investment officer.
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