By Wayne Cole
SYDNEY (Reuters) – Asian stocks got off to a muted start on Monday as the surge in coronavirus cases in Europe and the United States threatened the global outlook, as Chinese leaders gathered to reflect on the future of the economic giant .
The United States has seen its highest ever number of new COVID-19 cases in the past two days, while France has also drawn up unwanted records and Spain has announced a state of emergency .
This combined with no clear progress on a US stimulus package to lower S&P 500 futures by 0.5% (). EUROSTOXX 50 () futures fell by 0.4% and futures () by 0.3%.
The largest MSCI index for Asia-Pacific stocks outside of Japan () remained stable, still below its recent 31-month high. Japan’s Nikkei () hesitated on either side of stability, and South Korea’s main index fell 0.3% ().
Chinese blue chips () lost 1.1% as the country’s leaders gathered to chart the country’s economic course for 2021-2025, balancing growth and reforms in an uncertain global context and escalating tensions with the United States .
Chart – Asian stock markets: https://product.datastream.com/dscharting/gateway.aspx?guid=516bc8cb-b44e-4346-bce3-06590d8e396b&action=REFRESH
A busy week for monetary policy sees three major central banks come together. The Bank of Canada and the Bank of Japan are expected to hold the fire for now, as the market assumes the European Central Bank will appear cautious about inflation and growth even if it skips further easing.
Data due Thursday should show US economic output rebounded 31.9% in the third quarter, following the historic second quarter collapse led by consumer spending.
Westpac analysts noted that such a rebound would still leave GDP around 4% lower than at the end of last year, with business investment still lagging behind.
“To fully recover the lost activity, a significant additional fiscal stimulus is essential,” they argued in a note.
The US presidential election will again be important as markets take into account the possibility of a Democratic president and Congress, which would likely lead to increased government spending and borrowing going forward.
These prospects hit their highest level since early June last week at 0.8720%
“We have increased the likelihood of a Democratic sweep, already our baseline scenario, from 40% to just over 50% and increased our expectation of Biden to win from 65% to 75%,” analysts wrote. NatWest Markets in a note.
“We believe that steeper US yield curves and a weaker USD should prevail in our baseline scenario. ”
The dollar stagnated on Monday, after falling sharply last week. The euro stood at $ 1.1840 () and just below its recent high of $ 1.1880, while the dollar was pinned at 104.80 yen.
The was a firmer fraction at 92.904 (), after losing nearly 1% last week.
In commodities markets, gold fell 0.1% to $ 1,898 an ounce
Oil prices have fallen further in anticipation of a surge in supply and demand for Libyan crude caused by the surge in coronavirus cases in the United States and Europe.
Brent futures () fell 65 cents to $ 41.12 a barrel, while US crude () fell 69 cents to $ 39.16.
(This story was passed on to correct the S&P 500 in the title)