Global stocks drift as wary investors expect dark US job data

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LONDON (Reuters) – Global stocks were tied up on Thursday due to rising deaths from the new coronavirus and worsening economic hardship, with another record week of unemployment claims expected in the United States.

FILE PHOTO: Passers-by wearing protective masks after a coronavirus epidemic (COVID-19) are reflected on a screen displaying stock prices outside a brokerage house in Tokyo, Japan, March 17, 2020. REUTERS / Issei Kato

Investors have sought the security of the US dollar, which has clung to recent gains, while oil futures have surged after US President Donald Trump said he expected the Saudi Arabia and Russia quickly reach an agreement to end their oil price war.

In Japan, the Nikkei index finished down 1.37%, taking its losses to 25% so far this year. In a meandering session, European stocks made provisional gains, the pan-European STOXX 600 gaining 0.4%. Wall Street futures added 2% after plunging overnight.

“WE. Unemployment demands are expected to rise again and in this environment we cannot speak of a resumption of stocks in the short term. The best you can hope for is stabilization in the current environment, “said François Savary, chief investment officer at Swiss Partners, asset manager Prime Partners.

In Europe, oil and gas stocks rose by more than 5%, with Royal Dutch Shell, Total SA and BP leaping from 3.3% to 5.0%, thanks to the rise in oil prices.

Brent crude futures rose 11.36%, or $ 2.81, to $ 27.55, while US West Texas Intermediate (WTI) crude futures States rose 10.0%, or $ 2.03, to $ 22.34.

Trump said he had recently spoken with leaders of Russia and Saudi Arabia and expected the two countries to reach an agreement within a few “days” to cut production and thereby drive up prices.

British Airways owner IAG’s shares rose 1.5% after someone familiar with the matter said British Airways was in talks with its union over a plan to suspend approximately 32,000 employees so that she could survive the coronavirus pandemic.

Eurozone government bond yields rose as investors cautiously returned to riskier assets. German 10-year government bond yields rose 3 basis points to -0.44%, moving away from the lows of -0.55% reached on Monday. [L8N2BQ264]

The yield on 10-year US Treasuries – which goes down when prices go up – has dropped to 0.5680%.

“There had been fears of the bond market exploding, but for the moment, there is a return to normal correlation in the market, so we don’t see a vicious circle where bonds lower stocks and stocks are lowering bonds, “said Savary. .

US labor market data will likely provide the next test of market sentiment and pain in the world’s largest economy.

The first claims for unemployment benefits last week likely broke the record 3.3 million last week, with 3.5 million expected, according to a Reuters survey of economists.

“We think the figure of just under 3.5 million last week is ripe for a dramatic upward revision,” said Tom Porcelli, chief US economist at RBC Capital Markets.

“This week we are looking for another considerable increase of 4 million. “

DIFFICULT DAYS

China and South Korea have shown signs of controlling the virus, reporting a decline in the number of new cases, but progress remains fragile and infections are skyrocketing globally.

The World Health Organization has said that the number of cases worldwide will reach 1 million and the number of deaths 50,000 in the coming days. It currently stands at 46,906.

US President Donald Trump, who had initially downplayed the epidemic, told reporters at the White House on Wednesday that he was considering a plan to suspend flights to hot coronavirus areas in the United States.

“Tough days are ahead for our nation,” said Trump.

In the currency markets, the dollar has given up on some of its recent gains, with oil gains lifting some commodity currencies.

The Australian dollar gained 0.6% to $ 0.6110 and the Canadian dollar strengthened 0.65% to C $ 1.4146.

The dollar index against a basket of six major currencies remained stable at 99.470 after gaining 0.53% overnight, as the US currency advanced against most of its major counterparts. The euro fell 0.3% to $ 1.0934 with the appreciation of the dollar.

The South African rand hit a new low while the Turkish lira hit a two-year low.

Spot gold lost 0.3% to $ 1,586.24 an ounce.

Additional reports by Tom Westbrook; edited by Philippa Fletcher

Our standards:Principles of the Thomson Reuters Trust.

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