US Markets

GLOBAL MARKETS-Markets on edge as pandemic resurgence meets U.S. stimulus hopes

Credit: REUTERS/ELOISA LOPEZ

Financial markets remained shaky on Friday as hopes for a new round of U.S. fiscal stimulus met fears that social restrictions to tackle the coronavirus pandemic would undermine economic recovery.

By Julien Ponthus

LONDON, Oct 16 (Reuters) - Financial markets remained shaky on Friday as hopes for a new round of U.S. fiscal stimulus met fears that social restrictions to tackle the coronavirus pandemic would undermine economic recovery.

Oil prices and Asian stocks slid, but European stocks recovered in morning trading after sharp losses the day before.

"It’s a tug-of-war between risks that are well flagged, the pandemic, the U.S. election, Brexit, and at the same time hope that these same risks can be resolved in matter of weeks or months", said Emmanuel Cau, head of European equity strategy at Barclays.

"In the meantime, it's hard for investors to take positions on the short term given all the uncertainties," he said. "Looking forward to 2021, there’s a good probability these risks will be behind us."

The pan-European STOXX 600 .STOXX rose 0.8% about an hour after the open. They had lost over 2% on Thursday as new social restrictions in Europe, including a curfew in major French cities and tighter restrictions in London, spooked investors.

The euro EUR=EBS also regained some ground, rising about 0.1% to $1.1717 as investors shifted from perceived safe havens such as the dollar and the yen to riskier currencies.

Germany's 10-year bond yield was set for its biggest weekly drop since August as doubts grew about the economic recovery in the euro zone.

Uncertainty regarding the trade negotiations between the European Union and the UK remained high, as British Prime Minister Boris Johnson was expected to respond to the EU's demand for more concessions.

Sterling gained about 0.2% against the euro at 0.9050 pence and rose 0.3% against the dollar at $1.2938.

Oil prices continued to slide, dragged down by concerns that resurgent COVID-19 cases in Europe and the United States would curtail demand.

Brent crude futures for December LCOc1 dropped 0.5% to $42.93 a barrel. U.S. West Texas Intermediate (WTI) crude futures for November delivery CLc1 dipped 0.4%, to $40.81 a barrel.

Spot gold XAU= prices were flat at $1,909.05 but looked set for their first weekly drop in three.

Futures for Wall Street's S&P 500 Esc1 were flat after ending lower on Thursday following a rise in weekly jobless claims.

U.S. President Donald Trump's offer on Thursday to increase the size of a fiscal stimulus package to win the support of Republicans and Democrats helped narrow Wall Street's losses, though many investors still believe a deal is unlikely before the Nov. 3 election.

Global assetshttp://tmsnrt.rs/2jvdmXl

Global currencies vs. dollar http://tmsnrt.rs/2egbfVh

Emerging marketshttp://tmsnrt.rs/2ihRugV

MSCI All Country Wolrd Index Market Caphttp://tmsnrt.rs/2EmTD6j

(Reporting by Julien Ponthus)

((Suzanne.Barlyn@thomsonreuters.com; 646-223-8550))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

SPX

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More