GLOBAL MARKETS-World shares sink after China data misses forecasts

GLOBAL MARKETS-World shares sink after China data misses forecasts

Reuters  | Aug 14, 2020 17:00

GLOBAL MARKETS-World shares sink after China data misses forecasts

* China data misses expectations
* Travel stocks sink on British quarantine move
* Treasury yields remain high after 30-year auction
* Graphic: World FX rates in 2020

By Tom Arnold and Stanley White
LONDON/TOKYO, Aug 14 (Reuters) - Global shares dipped on
Friday after lacklustre Chinese economic data and worries about
a delay in U.S. fiscal stimulus discouraged some investors from
taking on risk.
European shares were also dragged lower by a hit to travel
stocks after Britain added more European countries to its
quarantine list. The pan-European STOXX 600 .STOXX was down 0.7%, although
on track to gain for a second straight week.
MSCI's world index .MIWD00000PUS was 0.2% lower, drifting
further from all-time highs touched in February. The index has
still rallied close to 50% from March's trough in the wake of
the COVID-19 pandemic.
"The rally was over-extended and most of the good news is
already priced in," said Francois Savary, chief investment
officer at Swiss wealth manager Prime Partners.
"There are no more positive than expected earnings and we're
back to the macro background and the checking of the data
regularly to see if the recovery is sustainable. Markets are
pricing a lot of good news and we will be entering a period of
volatility with the U.S. elections coming up."
Preliminary European employment and GDP numbers due at 0900
GMT and U.S. retail sales figures at 1230 GMT will be watched
for signs of divergence between the U.S. and European
Data showing a slower-than-expected rise in Chinese
industrial production and a surprise fall in retail sales put
Asian shares on the backfoot. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 0.1%, although shares in Japan .N225 rose
Chinese shares .CSI300 rose 1.5% in choppy trade, with the
data suggesting domestic demand is still struggling after the
coronavirus outbreak. E-mini futures for the S&P 500 EScv1 were flat.
The benchmark German 10-year Bund yield DE10YT=RR fell to
-0.42% after rising for three sessions and having touched a
six-week peak in early trade. Yields on U.S. Treasuries remained elevated after an auction
of 30-year bonds on Thursday met weak demand.
Further equity gains are likely to be limited as investors
await progress in negotiations over U.S. economic stimulus,
which is necessary to prevent a nascent recovery in the world's
largest economy from sliding into reverse.
Some traders stuck to the sidelines before a meeting between
U.S. and Chinese officials about their Phase 1 trade deal on
Saturday. Spot gold XAU= fell 0.35 to $1,947.43 as high U.S.
Treasury yields prompted investors to reassess their positions.
Bullion has declined more than 4% so far this week, its biggest
weekly percentage fall since early March.
Data on Thursday showed the number of Americans seeking
unemployment benefits dropped below one million for the first
time since the start of the pandemic, but was not enough to
change economists' views that the jobs market is faltering.
U.S. Treasury yields also supported the U.S. dollar, which
held steady at 106.90 yen JPY= and $1.1812 against the euro
EUR=D3 .
The dollar index was headed for an eighth consecutive week
of losses, its longest weekly losing streak since June 2010.
Oil edged further below $45 a barrel amid worries about
supply recovery and rising supply. Brent crude LCOc1 fell or
0.7% to $44.67, reversing this week's gains. U.S. West Texas
Intermediate CLc1 slipped 0.6% to $41.99. O/R

Global assets
Global currencies vs. dollar
Emerging markets
MSCI All Country Wolrd Index Market Cap
2020 asset performance
Reuters US jobless data poll

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