GLOBAL MARKETS-Asian stocks set for best weekly gain in 9 years, ECB stimulus boosts euro; U.S. jobs eyed

GLOBAL MARKETS-Asian stocks set for best weekly gain in 9 years, ECB stimulus boosts euro; U.S. jobs eyed

Reuters  | Jun 05, 2020 12:20

GLOBAL MARKETS-Asian stocks set for best weekly gain in 9 years, ECB stimulus boosts euro; U.S. jobs eyed

(Updates levels throughout)
* Asian stocks ease from multi-week peaks, valuations heady
* U.S. dollar slide continues
* Euro maintains strength
* U.S. unemployment report in view

By Swati Pandey
SYDNEY, June 5 (Reuters) - Asian stocks erased early losses
on Friday and were poised for their biggest weekly rise since
2011 while the euro hovered near a 1-1/2 month high as Europe's
central bank surprised with more stimulus, fuelling hopes for a
global rebound.
The market was a bit choppy as some investors chose to take
profits ahead of Friday's nonfarm payrolls data, which is
expected to show further deterioration in the U.S. jobs market.
MSCI's broadest index of Asia-Pacific shares outside of
Japan .MIAPJ0000PUS rose 0.1%, reversing early losses to stay
near a 12-week top.
The index is up about 6.5% this week, on track for its best
weekly showing since December 2011.
South Korea's KOSPI .KS11 was among the best performers on
Friday, up 0.7% while Australia's benchmark index .AXJO and
Japan's Nikkei .N225 each added 0.1%.
Chinese shares were still in red with the blue-chip index
.CSI300 off 0.3%.
Emerging market equities, which have boasted solid gains
this week, were in a profit taking mode. "This market has gone up so far, so fast there's a lot of
people saying, 'I'm going to take a little profit,'" said Jim
Paulson, chief investment strategist at The Leuthold Group in
E-mini futures for the S&P 500 EScv1 rose 0.3%.
Overnight, the S&P 500 .SPX eased 0.34% and the Nasdaq
Composite .IXIC lost 0.69%. The Dow .DJI bucked the trend
and ended a shade higher.
Investors were a tad cautious at these heady levels with
valuations at their highest since the boom in 2000,
according to Matthew Sherwood, investment strategist for
Technical chart indicators suggest the market is at
"over-bought" levels, Sherwood added, a signal that a correction
is due.
World equity markets were thrashed in March when they hit
"bear territory" on fears the COVID-19 driven lockdowns would
push the global economy into a long and deep recession.
Market sentiment has since been bolstered by powerful
central bank stimulus.
"Central banks have rightly stepped in to cushion the
economic blow of COVID-19 and unquestionably succeeded in
steadying the ship," said Bob Michele, chief investment officer
and head of the global fixed income, currency & commodities
group at J.P.Morgan Asset Management.
However, Michele warned the massive scale of quantitative
easing would distort pricing and mute traditional signals from
bond markets on growth and inflation, advocating "co-investing"
alongside central banks.
Investor attention is now focused on Friday's U.S.
employment report, which is expected to show nonfarm payrolls
fell in May by 8 million jobs after a record 20.54 million
plunge in April.
The U.S. unemployment rate is forecast to rocket to 19.8%, a
post-World War Two record, from 14.7% in April. Currency markets show continued confidence in the expected
revival of the global economy.
The euro EUR= was last at $1.1337 after hitting a 12-week
high of $1.1361 on Thursday led by the European Central Bank's
(ECB) plan to boost its emergency bond purchases.
The common currency is up 2% this week, on track for its
third consecutive weekly gain.
All eyes will next be on the U.S. Federal Reserve, which
holds its regular two-day policy meeting next week.
The U.S. dollar was a tad higher against the Japanese yen
JPY= at 109.19, having risen 1.2% so far this week.
The dollar index, =USD which measures the greenback
against a basket of major currencies, is poised for its third
straight weekly loss.
The risk sensitive Australian dollar AUD= held near a
five-month peak at $0.6947, on track for its third straight
weekly rise.
In commodities, U.S. crude CLc1 eased 4 cents to $37.37
per barrel and Brent LCOc1 added 8 cents to $40.07. O/R
Spot gold XAU= inched down to $1,709 an ounce. GOL/

Global assets
Global currencies vs. dollar
Emerging markets
MSCI All Country Wolrd Index Market Cap

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