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European shares pick up, dollar gains before quarter-end

EconomyJun 30, 2020 08:17AM ET
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2/2 © Reuters. FILE PHOTO: A man wearing a protective face mask walks past the Singapore Exchange 2/2

By Elizabeth Howcroft

LONDON (Reuters) - European shares picked up on Tuesday after a weak start, extending the optimism of the Asian session, and oil prices steadied as investors looked for signs of an economic recovery in the second half of 2020.

The MSCI world equity index, which tracks shares in 49 countries, was up about 0.1% at 1056 GMT, after Asian shares rose on strong data from the U.S. housing market and Chinese factories. European shares continued the rally.

World shares are down around 8% so far this year, having slumped 35% between Feb. 20 and March 23 in the most destructive sell-off since the Great Depression. But the world equity index is up 17.5% this quarter - on track for its biggest quarterly gain since the second quarter of 2009. (Graphic: Global markets and the tale of two quarters, http://fingfx.thomsonreuters.com/gfx/mkt/yzdpxrrxwpx/Pasted%20image%201593105658002.png)

Rising COVID-19 cases continue to show signs of a second deadly wave of the pandemic, but markets still expect a global economic recovery with lockdown measures easing.

Los Angeles has become a new epicentre in the pandemic as coronavirus cases and hospitalisations surge there despite California Governor Gavin Newsom's orders requiring bars to close and residents to wear masks in nearly all public spaces.

The World Health Organization (WHO) will "read carefully" a Chinese study on a new flu virus found in pigs, a spokesman said, adding that the findings underscored the importance of influenza surveillance during the current pandemic.

"Asset markets are looking beyond COVID stats," said Neil Jones, head of FX sales at Mizuho Bank. "There's some expectation of containment and then, further down the line, an expectation of some form of measure to combat the virus."

U.S. Federal Reserve Chair Jerome Powell said on Monday the outlook for the world's biggest economy was "extraordinarily uncertain". (Graphic: World financial markets in 2020, http://fingfx.thomsonreuters.com/gfx/mkt/nmopajllwva/Pasted%20image%201593383581288.png)

European shares edged up, with the Euro STOXX 600 up 0.1% at 1102 GMT having been relatively range-bound for the past two weeks. Germany's DAX was up 0.3%.

London's FTSE 100 was down 0.6%. Britain's economy shrank by the most since 1979 in early 2020 as households slashed their spending, according to official data that included the first few days of the lockdown.

Supported by end-of-quarter flows, the dollar rose to 97.722 against a basket of currencies, up 0.3% on the day.

"I would expect overall dollar demand to continue as we go into July," Mizuho's Neil Jones said.

"If there's a summer lull then we may see a dollar sell-off into the elections but as we run up to the end of the year I would expect to see a resurgence of dollar demand," he added.

The euro was down around 0.3% against the dollar, at $1.1208, while the Australian and New Zealand dollars also edged down.

Oil prices slipped as traders took profits after sharp gains the previous session and Libya's state oil company flagged progress in talks to resume exports, potentially boosting supply. Prices then recovered partially.

U.S. crude was down 0.6% at $39.15 a barrel, having hit as low as $39.00, while Brent crude slipped 0.6% to $41.16 per barrel.

China's parliament passed national security legislation for Hong Kong in response to last year's pro-democracy protests. The United States, Britain and other Western governments have said the legislation erodes the autonomy the city was granted at its 1997 handover. Market reaction was limited.

Demand for safe German debt was little changed, with the 10-year government Bund yield at -0.478% (DE10YT=RR).

Annual inflation in the 19 countries sharing the euro accelerated to 0.3% in June from a four-year low of 0.1% in May, beating forecasts for no change and supporting the European Central Bank's expectation that a negative reading may be avoided.

European shares pick up, dollar gains before quarter-end
 

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Comments (13)
Kaveh Sun
Kaveh Sun Jun 30, 2020 2:00AM ET
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It follows us market most of the time.
Ricardo Diogo
Ricardo Diogo Jun 30, 2020 1:41AM ET
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which one is real data? industrial production in Korea and Japan or China pmi?
Dietmar Stahl
Dietmar Stahl Jun 30, 2020 1:39AM ET
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Scientists says earth can support 9-10 billion people.We are at 8 Billion now. Means in 10 -15 years earth is maxed out.
Patron Silver
Patron Silver Jun 30, 2020 1:39AM ET
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bring on bills cure
Willy andreas
Willy andreas Jun 30, 2020 1:00AM ET
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hold on.. are we still believe in China's Data?
Vv Pp
Vv Pp Jun 30, 2020 1:00AM ET
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in US we believe in flat earth and the president says put inside you UV light, Chinese data is the problem?
David Wang
David Wang Jun 30, 2020 12:45AM ET
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China’s data has always been whatever the government wants the world to think it is. But the pandemic elevated China’s data to new and unprecedented levels of deep-fake status all around.
Nicholas Segalle
Nicholas Segalle Jun 30, 2020 12:45AM ET
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::: clutches pearls ::: they’d never do that!
Patron Silver
Patron Silver Jun 30, 2020 12:45AM ET
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Nicholas Segalle clutch my natty natz
icouldnotthink67 .
icouldnotthink67 . Jun 30, 2020 12:00AM ET
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That headline...
Tricky Dick
TrickyDick Jun 29, 2020 11:10PM ET
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Cheering the data?
Kyle Uehara
Kyle Uehara Jun 29, 2020 11:10PM ET
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Glad i wasnt the only one confused by this headline
Josh Miller
Josh Miller Jun 29, 2020 11:03PM ET
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Nobody cares about corona virus. Its being used to manipulate the markets
djavid hosseini
djavid hosseini Jun 29, 2020 11:03PM ET
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Yeah bro
Derek Schuger
Derek Schuger Jun 29, 2020 10:40PM ET
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Is china still 3rd world?
djavid hosseini
djavid hosseini Jun 29, 2020 10:40PM ET
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No 0rd world.
Kate ki
Kate ki Jun 29, 2020 10:40PM ET
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Yes
Edmund Benaojanovic
Edmund Benaojanovic Jun 29, 2020 10:40PM ET
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Developing country. It's the 2nd biggest economy.
Ship Buy
Ship Buy Jun 29, 2020 10:40PM ET
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mostly china claims herself superpower especially to towards her people. when dealing with trade, she claims herself as underdeveloped. no one knows her status.
Kate ki
Kate ki Jun 29, 2020 10:40PM ET
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Edmund Benaojanovic  yeah its still third world category
Vv Pp
Vv Pp Jun 29, 2020 10:36PM ET
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Europe and mostly Asia recover from Covid. In 3rd world countries it's still getting worse (Latin America, USA etc)
perplexed76 .
perplexed76 . Jun 29, 2020 10:36PM ET
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china recover (cover again) info about a new china virus jump
Tiago Birro
Tiago Birro Jun 29, 2020 10:36PM ET
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USA, biggest economy in the world and 2 times world war champion, 3rd world country??
Michael Redden
Michael Redden Jun 29, 2020 10:36PM ET
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3x intercontinental 5x tag-team champion
Fabio falec
falec Jun 29, 2020 10:36PM ET
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Old news. Now back on track!
Tricky Dick
TrickyDick Jun 29, 2020 10:33PM ET
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More bogus data from China of course
Gamer Turtle
GamerTurtle Jun 29, 2020 9:54PM ET
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does data even matter in the trading world today? lol
neang aee 냥에
neang aee 냥에 Jun 29, 2020 9:45PM ET
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Unbelievable belief on Chinese statistics data
Ship Buy
Ship Buy Jun 29, 2020 9:45PM ET
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totally agree. official data still says growth. fake data, recession is truth. Yangtze river flooding is destroying a medium size city and heading to si chuan province capital now.
 
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