* Investors fret over infections in U.S, Germany, China
* Dollar, Japanese yen rise in safe-haven bid
* Oil gains on lower U.S. inventory data
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Herbert Lash and Tom Arnold
NEW YORK/LONDON, June 18 (Reuters) - Global stock markets
drifted lower on Thursday as an increase in new coronavirus
cases in some U.S. states and China crushed hopes of a swift
economic comeback from the pandemic, underpinning demand for
safe-haven currencies such as the dollar and Japanese yen.
The daily count of infections hit a new milestone in
California and Texas, while around 400 workers tested positive
for the virus at a slaughterhouse in northern Germany, prompting
the closure of local schools. A Chinese medical expert, meanwhile, said Beijing has
brought its recent outbreak under control.
U.S. Treasury yields fell and crude oil rose as worries
about fuel demand following the rising coronavirus cases were
offset by U.S. government data showing lower inventories of
gasoline and distillates, indicating higher demand.
Justin Onuekwusi, portfolio manager at Legal & General
Investment Management, said the flare-ups in Germany and China
and the rise in infection rates in some U.S. states were cause
for concern.
"It's going to be a theme where we see economies having to
do mini-lockdowns and isolation measures in order to contain the
virus. The question is how much it affects markets," he said.
U.S. data that suggested a declining pace of Americans
filing for unemployment benefits has stalled amid a second wave
of layoffs reminded investors the economy faces a long and
difficult recovery from the COVID-19 recession. Employers hired a record 2.5 million workers in May as
businesses reopened, an unexpected bright spot that investors
cheered last week. But at least 29 million people are collecting
unemployment checks, a sign of the tough road ahead.
"The restarting of the economy is going to be slow, it's
going to be uneven and initial jobless claims today reflect
that," said Kristina Hooper, chief global market strategist at
Invesco.
As the economy reopens and economic activity increases,
infection rates are rising, which Hooper said raises the
question: What happens if that continues? Many states will not
impose lockdowns to allow economic activity to continue, she
said.
"You could have a situation where infections continue to
rise, but it doesn't necessarily have the impact on economic
activity that it did in March and April," Hooper said.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.05%, while the pan-European STOXX 600 index .STOXX lost
0.84%. Emerging market stocks bucked the trend, rising 0.13%.
Wall Street was mostly lower but the Nasdaq and S&P 500
pulled slightly ahead.
The Dow Jones Industrial Average .DJI fell 1.03 points, or
-0%, to 26,118.58, the S&P 500 .SPX gained 3.13 points, or
0.10%, to 3,116.62 and the Nasdaq Composite .IXIC added 35.04
points, or 0.35%, to 9,945.57.
CHINESE BRIGHT SPOT
China's blue-chip CSI300 shares .CSI300 were a bright
spot, adding 0.7%, helped by reassurances from its central bank
governor that the world's second-largest economy would maintain
ample financial liquidity in the second half of 2020 as the
economy recovers. Euro zone bonds hardly budged, even as the European Central
Bank announced record demand for its new round of cheap loans,
with the strong take-up expected to support the bond market.
Italian yields slipped slightly, with 10-year yields falling
to a new low since late March of 1.33%. They were last down 3.5
basis points at 1.34%. IT10YT=RR British government bond yields touched their highest since
June 10 after the Bank of England increased its bond-buying
program by another 100 billion pounds ($125 billion) to help
revive the economy, but sharply slowed the pace of its
purchases. L8N2DV2K2
In currency markets, the yen touched a six-day high of
106.70 in Asian trading and was last neutral at 107 JPY=EBS .
The Norwegian crown was the biggest mover among major
currencies, after Norway's central bank said the country's
economic prospects had improved more than expected in recent
weeks and its key policy interest rate would be kept unchanged.
The crown was up 0.6% versus the dollar at 9.4560 NOK=D3 .
The dollar index =USD rose 0.241%, with the euro EUR=
down 0.17% to $1.1224. The yen strengthened 0.20% versus the
greenback at 106.79 per dollar.
Benchmark 10-year U.S. Treasury notes US10YT=RR fell 3.3
basis points to yield 0.7019%.
U.S. crude CLc1 rose 1.24% to $38.43 per barrel and Brent
LCOc1 was at $41.20, up 1.2% on the day.
In commodity markets, spot gold XAU= dropped 0.3% to
$1,720.77 an ounce. /GOL
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
S&P 500 market cap, daily moves https://tmsnrt.rs/2YCDodm
Asset performance vs outbreak https://tmsnrt.rs/2YF3T1T
Stocks and oil versus COVID-19 cases https://tmsnrt.rs/3cXWNdO
Asia stock markets https://tmsnrt.rs/2zpUAr4
Second wave in the United States https://tmsnrt.rs/2BmXZKv
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