* Deaths from COVID-19 reached half a million on Sunday
* Dollar, bonds supported in safe haven call
By Wayne Cole
SYDNEY, June 29 (Reuters) – Asian equity markets started the week with a cautious tone on Monday as the relentless spread of the coronavirus finally prompted investors to question their optimism about the global economy in favor of bonds shelters and the US dollar.
The largest MSCI index of Asia Pacific stocks outside of Japan fell 0.6% and further from a four-month high last week. The Japanese Nikkei lost 1.3% and the Chinese blue chips 0.6%.
In a more promising sign, the E-Mini futures for the S&P 500 recovered their expected losses to climb 0.3% and the EUROSTOXX 50 futures contracts added 0.2%. Futures on FTSE fell 0.2%.
Wall Street vacillated on Friday as some US states re-examined their plans to reopen. The global death toll from COVID-19 reached half a million people on Sunday, according to a Reuters count.
To date, about a quarter of all deaths have occurred in the United States, with an outbreak in a handful of southern and western states that reopened earlier.
“Rising rates of COVID-19 infection in the United States have dampened market dynamics despite improvements in the global economy, which continues to beat most data expectations,” wrote the JPMorgan analysts in a note.
“Our strategists remain optimistic and recommend buying on dips but also on selectivity,” they added. “Traditional hedging such as JPY against USD, USD against EM FX, gold and quality stocks continued to outperform this month. We remain overweight US stocks, but move emerging market stocks to neutral US credit and remain neutral.
Sovereign bonds benefited from the transition to security, with yields on 10-year US bonds falling to 0.64%, briefly reaching 0.96% in early June.
The US dollar went in the opposite direction, reaching 97.461 against a basket of currencies, against a low of 95.714 at the start of the month.
It was slightly higher on the yen at 107.20 on Monday, but well in the recent range of 106.06 to 107.63. The euro stood at $ 1.1240 after finding solid support around $ 1.1167.
This is an important week for the US data with the ISM manufacturing index on Wednesday and the payroll on Thursday, before Independence Day. Federal Reserve Chairman Jerome Powell will also testify on Tuesday.
“WE. The economic data will reinforce that the economy is going through the worst of the recession in our opinion, “said Joseph Capurso, CBA analyst.
“But a double-dip recession is possible if general restrictions are re-imposed, causing the dollar to soar. ”
In the commodities markets, gold remained at its highest level since early 2012 at $ 1,771 an ounce.
Oil prices have plummeted amid fears that the pandemic will slow the reopening of some economies and thereby jeopardize fuel demand.
Brent crude futures fell 70 cents to $ 40.32 a barrel, while US crude fell 62 cents to $ 37.87.
Our standards:Principles of the Thomson Reuters Trust.