GLOBAL MARKETS-COVID recovery vs COVID reality

GLOBAL MARKETS-COVID recovery vs COVID reality

Reuters  | Jul 03, 2020 17:20

GLOBAL MARKETS-COVID recovery vs COVID reality

* Shanghai shares hit 5-year high on service sector recovery
* U.S. payrolls jump 4.8 mln but hurdles lie ahead
* European markets see subdued end to week
* Copper on best weekly run in nearly three years
* Rising U.S. COVID-19 cases threaten U.S. recovery
* Graphic: World FX rates in 2020

By Marc Jones
LONDON, July 3 (Reuters) - World shares inched towards a
four-month high on Friday and industrial bellwether metal copper
was set for its longest weekly winning streak in nearly three
years, as recovering global data kept nagging coronavirus nerves
at bay.
The market rally fuelled by record U.S. jobs numbers had
largely blown itself amid a spike in U.S. COVID cases, though
the fastest expansion in China's services sector in over a
decade and more stimulus ensured optimism remained. Chinese shares had charged to their highest level in five
years .SSEC .SS , helping the pan-Asian indexes to 4-month
peaks, so the sight of European markets stalling early on took
some traders by surprise. .EU
Currency and commodity markets also had a subdued feel after
an otherwise strong week for confidence-sensitive stalwarts such
oil LCOc1 , copper /MCU3=LX , sterling GBP= and the
Australian dollar AUD= , which all struggled on Friday.
"I think infection rates and fears of localised lockdowns
have doused some of the enthusiasm," said Societe Generale
strategist Kit Jukes.
"We have three elements now; vaccine hopes, decent data in
most places but also the return of infection rates which can
make you nervous."
Against a basket of currencies, the dollar rose slightly in
early London trading. It was up less than 0.1% at 97.306 =USD
and still firmly on track for its biggest weekly fall since the
first week of June.
The euro was down at $1.1226 EUR=EBS and though it gained
against the safe Swiss franc EURCHF=EBS it fell versus the
sometimes commodity-driven Norwegian crown EURNOK=D3 .
S&P 500 futures were down 0.2% ESv1 but volumes were lower
than usual due to a U.S. markets holiday on Friday for
Independence Day.
U.S. nonfarm payrolls surged by 4.8 million jobs in June,
above the average forecast of 3 million jobs in June, thanks to
rises in the hard-hit hospitality sectors. But economists noted there were caveats to the upbeat
headline figures.
The number of permanent job losers continued to rise,
increasing by 588,000 to 2.9 million in June while the
unemployment rate remains a chunky 7.6 percentage points above
its February level. A Deutsche Bank analysis put the U.S.
unemployment rate behind all its developed market peers barring
The recovery also faces more headwinds as a surge of new
coronavirus infections prompts U.S. states to delay and in some
cases reverse plans to let stores reopen and activities resume.

More than three dozen U.S. states saw increases in COVID-19
cases, with cases in Florida spiking above 10,000. Nevertheless markets are largely overlooking the spikes,
taking the view that overall the situation was still improving
Ten-year German government bond yields are up 5 basis points
this week and set for their biggest weekly rise in a month,
though they nudged down on Friday to -0.44%. Riskier Italian
yields fell to 1.26% as well though, which is their lowest since
late March. GVD/EUR
Oil prices also eased after an otherwise solid week. Brent
crude LCOc1 fell 0.65% to $42.86 a barrel while U.S. crude
CLc1 dropped 0.66% to $40.38 a barrel. Both were around $25
this time two months ago.
Copper prices were poised for a seventh consecutive weekly
gain, their longest winning streak in nearly three years,
despite a slight easing on the day after top supplier Chile had
assured traders about supply.
Three-month LME copper CMCU3 was hovering at $6,040 a
tonne, more than $1,500 up from lows it ploughed to in March.
"The one issue that hangs over all the markets is will we
see a surge in secondary infections that will trigger a second
wave of national rather than regional shutdowns?" Malcolm
Freeman, director of Kingdom Futures, wrote in a note.

COVID-19 in U.S.
China recovery

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (Australia) English (South Africa) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.