GLOBAL MARKETS-Stocks, yields slip as investors wait for U.S. stimulus

(Adds U.S. market open; changes dateline; previous LONDON)
* Equity markets struggle for direction, Europe falls
* Bond yields edge lower on stimulus concerns
* Oil trades little changed
* 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 slipped
and bond yields fell on Thursday as investors awaited an
agreement on a U.S. aid package to mitigate the fallout from the
coronavirus crisis, with poor corporate earnings reports also
weighing on European shares.
Safe-haven gold extended its record-breaking run, driven by
expectations of more stimulus to counter the pandemic, while the
dollar gained after data suggested the U.S. labor market is
stalling amid a resurgence in COVID-19 cases.
Initial claims for state unemployment benefits fell 249,000
to a seasonally adjusted 1.186 million for the week ended Aug.
1, the Labor Department said, the lowest reading since
mid-March. But 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."
The four principal negotiators in Washington appeared to be
near agreement on some topics, but still trillions of dollars
apart on major issues, including the size of a federal benefit
for tens of millions of unemployed workers. 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 0.14%, the S&P
500 .SPX lost 0.01% and the Nasdaq Composite .IXIC added
0.14%.
MSCI's benchmark for global equity markets .MIWD00000PUS
fell 0.14% to 563.3.
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 0.5232%.
The euro EUR= climbed to its highest against the dollar
since May 2018 before giving up its gains. The euro EUR= was
up 0.19% to $1.1883.
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 fell 0.091%, while the Japanese yen
JPY= strengthened 0.13% versus the greenback at 105.40 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 prices XAU= rose $19.7201, or 0.97%, to
$2,059.12 an ounce.
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 rose $0.38 to $45.55 a barrel.
U.S. crude futures CLc1 gained $0.20, to $42.39 a barrel.


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