GLOBAL MARKETS-Stocks rise, yields slip as investors await stimulus

* Equity markets edge higher with eyes on Washington
* Bond yields edge lower on stimulus concerns
* Oil trades little changed; gold at new highs
* Pound at five-month high after BoE keeps rates steady
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Herbert Lash
NEW YORK, Aug 6 (Reuters) - Global equity markets edged
higher and bond yields eased off earlier lows on Thursday as
investors awaited word on a new U.S. aid package to counter the
economic fallout from the coronavirus crisis.
Safe-haven gold extended its record-breaking run, driven by
expectations of more stimulus, while the dollar gained after
data showed fewer Americans sought jobless benefits last week.
Gold has been rising on concerns stimulus will fuel inflation
and erode the value of the dollar.
Initial claims for state unemployment benefits fell 249,000
to a seasonally adjusted 1.186 million for the week ended Aug.
1, the U.S. Labor Department said, the lowest reading since
mid-March. Revised data for June showing payrolls jumped by 4.314
million jobs instead of adding 2.369 million as previously
estimated cheered investors who see a stronger economy than
those that fear a resurgence in COVID-19 cases may indicate.
Still, a proper economic recovery is far away, said Jeffrey
Christian, managing partner of CPM Group.
"There are mixed signals that the economy is recovering and
some of the signs of recovery are relatively superficial as they
show aggregate figures and not how medium and small enterprises
continue to suffer," Christian said.
More than 1 million initial claims a week is not desirable
if you think the economy is recovering, said Yousef Abbasi,
global market strategist at StoneX Group Inc in New York. The
report, he said, supports the need for stimulus.
"It puts us right where the Fed wants to be, right where
you'd want to be, if you're thinking Washington needs to get
stimulus done," Abbasi said. "You don't want them to be too
encouraged by better data to slow their approach."
Republicans and Democrats remained far apart about what to
include in another wave of relief after nearly two weeks of
talks on next steps to address a crisis that has killed more
than 157,000 Americans and thrown tens of millions out of work.
The relief bill should be more targeted than the first to
preserve ammunition if another shutdown should require further
aid, former Reserve Bank of India Governor Raghuram Rajan told
the Reuters Global Markets Forum on Wednesday.
The major U.S. stock indices traded little changed, but
bourses in Europe fell as a three-day rally ran out of steam.
The pan-European STOXX 600 .STOXX fell 0.73% and London's
FTSE 100 .FTSE closed down 1.27%, pulled lower after Glencore
GLEN.L scrapped its dividend. Europe's mining index .SXPP
fell 2.3%.
The Dow Jones Industrial Average .DJI rose 0.6%, the S&P
500 .SPX gained 0.58% and the Nasdaq Composite .IXIC added
0.97%.
MSCI's benchmark for global equity markets .MIWD00000PUS
rose 0.19% to 565.17.
Treasury yields fell, with the 10-year note US10YT=RR
sliding to 0.504% at one point, its lowest ever after a big down
spike on March 9. The benchmark note last yielded 0.5395%.
The euro EUR= climbed to its highest against the dollar
since May 2018 before giving up its gains. The euro EUR= was
up 0.08% to $1.1871.
The weak dollar/strong euro trend will continue into next
year, a Reuters poll showed, on expectations the U.S. economic
recovery is flagging, especially compared with Europe.
The dollar index =USD rose 0.026%, while the Japanese yen
JPY= was flat versus the greenback at 105.57 per dollar.
The British pound GBP=D3 rose to a five-month high against
the dollar after the Bank of England left interest rates at 0.1%
and warned about possible risks from taking rates below zero.
Spot gold XAU= hit an all-time high of $2,069.21 an ounce
and was up $19.2631, or 0.94%, to $2,058.66 an ounce. U.S. gold
futures GCv1 settled 1% higher at $2,069.40.
Oil prices hovered near five-month highs as support from a
weak dollar =USD and falling U.S. crude inventories countered
bearish sentiment on fuel demand.
Brent crude futures LCOc1 settled down 8 cents at $45.09 a
barrel. U.S. crude futures CLc1 fell 24 cents to settle at
$41.95 a barrel.

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