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GLOBAL MARKETS-Stocks slip as U.S. jobs angst outweighs $2 trillion stimulus

Published 03/26/2020, 08:13 PM
Updated 03/26/2020, 08:20 PM
© Reuters.
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* U.S. stimulus bill clears Senate
* U.S. jobs claims due at 1230 GMT, unemployment spike
feared
* Euro STOXX falls 1.8%
* Wall Street futures down 1.3%
* German, British economic data paints grim picture
* Asia markets patchy: Nikkei down, ASX up
* Yen firms as risk sentiment finely balanced
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

(Updates prices throughout, adds Saxo Bank comment)
By Tom Wilson
LONDON, March 26 (Reuters) - Share markets across the world
fell on Thursday as nerves over jobs data likely to lay bare the
economic carnage from the coronavirus pandemic outweighed a $2
trillion U.S. stimulus package.
The U.S. Senate on Wednesday backed the massive bill aimed
at helping jobless workers and industries reeling from the
disruption caused by the outbreak, with the package heading for
the House of Representatives for a vote on Friday. Yet already questions flew over whether the bill would do
enough to soften the disease's economic hammer blow, with
investors bracing for a U.S. jobs report to show a huge spike in
unemployment in the world's biggest economy.
Europe's broad Euro STOXX 600 .STOXX fell 1.8%, with
bourses in Frankfurt .GDAXI , London .FTSE and Paris .FCHI
all down around 2.5% as a two-day rally faltered.
The sour mood was worsened by slumping consumer morale in
Germany and data showing stagnant retail sales in Britain last
month, even before the virus hit. E-mini futures for the S&P 500 ESc1 last traded down 1.3%,
pointing to a weaker start on Wall Street, while the MSCI world
equity index .MIWD00000PUS , which tracks shares in 49
countries, was flat.
Global markets have lost about a quarter of their value in
the last six weeks of virus-driven selling.
And while markets have found a measure of sustenance as
governments and central banks launch unprecedented support
measures, investors were struggling to work out how bad the
coronavirus impact would be.
"No-one is sure how long things are going to be locked down
for, how wide the virus will spread in the U.S., what the death
toll and hit on the economy will look like," said Salman Baig,
portfolio manager at Unigestion.
Earlier, Asia saw a mixed session. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.1% but
regional performances varied.
The Nikkei .N225 snapped three days of gains in Tokyo with
a 4.5% drop, while Australia's benchmark .AXJO rose for a
third day - its longest winning streak in six weeks.

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UNEMPLOYMENT TO SURGE
Markets were to get a glimpse of the on-the-ground damage to
the U.S. economy, with data on jobless claims due at 1230 GMT.
Forecasts in a Reuters poll ranged from 250,000 to 4 million
unemployment claims. RBC Capital Markets economists had expected a national
figure of more than 1 million, but say "it is now poised to be
many multiples of that", as lockdowns drive deep lay-offs.
"Something in the 5-10 million range for initial jobless
claims is quite likely," they wrote in a note. That compares to
a 695,000 peak in 1982.
"In less than two weeks, we have moved from full employment
to a number of job destruction we have never experienced in a
period of peace," wrote Christopher Dembik, head of macro
analysis at Saxo Bank.
Though the money at stake in the stimulus bill amounts to
nearly half of the $4.7 trillion the U.S. government spends
annually, it comes against a backdrop of bad news as coronavirus
spreads and signs of growing economic damage across the globe.
Tokyo's governor asked residents to avoid going out and to
"act with a sense of crisis". Spain's coronavirus death toll has
overtaken China's, while deaths globally have reached more than
21,000. In Singapore, the economy suffered its biggest contraction
in a decade in the first quarter and factories posted their
largest output drop since records began in 1983.
The growing sense of unease over the U.S. jobs figures also
played out in currency markets.
The dollar lost 0.8% against a basket of six major
currencies =USD to 100.150 as its recent rally continued to
lose steam. It also slumped 1.4% against the perceived safety of
the Japanese yen JPY= , extending losses through the morning.
The softer greenback buoyed emerging market currencies, with
MSCI's index .MIEM00000CUS touching a one-week high.
EMRG/FRX
Oil fell as fears of plunging demand outweighed expectations
of support from the U.S. stimulus. Brent crude futures LCOc1
fell 0.5% to $27.25, clawing back some of their earlier losses.
O/R
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/

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