GLOBAL MARKETS-Stocks gains curbed by end of Fed stimulus, virus concerns

* U.S. Treasury pulls plug on stimulus
* Dollar flat, U.S. Treasury yield slips
* Japan battling third wave
* Oil gains, gold dips
* Global assets: http://tmsnrt.rs/2jvdmXl

By Tom Arnold
LONDON, Nov 20 (Reuters) - World stocks edged higher Friday,
but gains were capped by dwindling stimulus in the United States
and concerns about the damage to the global economy from further
COVID-19 infections.
Hopes of a stimulus-led recovery receded after U.S. Treasury
Secretary Steven Mnuchin said key COVID-19 pandemic lending
programs at the Federal Reserve to support businesses and local
governments would expire by the end of 2020. Meanwhile, flare-ups in coronavirus cases dampened
sentiment, with California announcing fresh curfews to try to
fight surging infections, while Japan faces a third wave of the
virus, and parts of Europe are already under recently renewed
restrictions.
The World Trade Organization said that while global trade in
goods had rebounded in the third quarter from lockdowns, there
would be a slowdown at the end of 2020. Europe's STOXX 600 edged 0.4% higher, while the global
stocks index .MIWD00000PUS was also 0.2% firmer and on course
for its third weekly gain in a row.
S&P500 ESc1 futures were flat, while Dow futures 1YMc1
fell 0.1%, cancelling out a firmer lead from a strong Wall
Street session overnight.
The dollar =USD edged up before reversing later and the
10-year Treasury yield US10YT=RR slipped to the lowest in 10
days at 0.818%, before stabilizing in later trading.
Benchmark German 10-year Bund yields fell to a nine-day low
< US10DE10=RR>. In Asia, Japan's Nikkei .N225 stumbled 0.4%, weighed down
by a rise in new domestic coronavirus infections to record
highs. Chinese shares were 0.3% stronger.
In a letter to U.S. Federal Reserve Chair Jerome Powell,
Mnuchin said $455 billion allocated to Treasury under the CARES
Act should be instead available for Congress to reallocate.
Although not used extensively, Fed officials felt the
programs reassured financial markets and investors that credit
would remain available to help businesses, local agencies and
even non-profits through the pandemic.
Mnuchin's decision added to market anxiety about broader
economic growth as data shows the early fast recovery from a
historic plunge in the U.S. economy is fading, with more than 10
million who had jobs in January still out of work.
"The fact the market is able to resist to this extent means
there is some sun ahead, driven by the fact that in the medium
term economic activity will accelerate and there is positive
news on the vaccine," François Savary, chief investment officer
at Swiss wealth manager Prime Partners, said.
Investor sentiment was also hit by data that showed COVID-19
hospitalizations across the United States jumped by nearly 50%
in the last two weeks, threatening the recovery of the world's
largest economy as cities and states imposed lockdowns.
All three major U.S. stock indexes, however, got a boost
overnight after Senate Democratic Minority Leader Chuck Schumer
said Republican Majority Leader Mitch McConnell had agreed to
revive talks to craft a new fiscal relief package.
In Europe, investors clung to signs of progress on
coronavirus vaccines.
The European Union could pay more than $10 billion to secure
hundreds of millions of doses of the vaccine candidates being
developed by Pfizer-BioNTech and CureVac, an EU official
involved in the talks told Reuters. In currencies, the dollar index was at 92.20, broadly flat
on the day after it slipped overnight then picked up again as
European markets opened =USD . L1N2I60G8
The euro was flat against the dollar, at $1.18705 EUR=EBS ,
on track for a small weekly gain, while the Australian dollar is
having its best month versus the U.S. dollar since April, in
terms of percentage change AUD=D3 .
The New Zealand dollar NZD=D3 rose to a new two-year high
against the U.S. dollar.
In commodities, oil prices steadied after losses the
previous day, when concerns about coronavirus lockdowns
affecting fuel demand weighed on the market. O/R
The U.S. West Texas Intermediate (WTI) January crude
contract CLc2 added 0.5% to $42.09 a barrel. Brent crude
LCOc1 was up 0.7% at $44.51.
Gold XAU= fell 0.1% to $1,866.19 per ounce.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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