GLOBAL MARKETS-Asia cautious as U.S. riots weigh on S&P futures

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures slip as riots add to economic woe
* Asia markets hold steady for the moment
* Busy week sees ECB meet, U.S. payrolls report

By Wayne Cole
SYDNEY, June 1 (Reuters) - Asian share markets started on a
cautious note and gold gained on Monday as images of riots in
burning U.S. cities unnerved investors already tense over
Washington's power struggle with Beijing.
E-Mini futures for the S&P 500 ESc1 retreated 0.5% in
early action, while gold rose 0.77% to $1,739 an ounce XAU= .
Oil prices also slipped, while sovereign bonds picked up the
usual safe-haven bid.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged up 0.2%, as did Japan's Nikkei .N225 .
"If American consumers were reluctant to come out of their
Covid19 lockdown cocoon, fearing a secondary spreader with
police cars ablaze, freeways blocked, and videos of mass looting
shared through social media like wildfire, they're not going to
feel any safer,' said Stephen Innes, chief global markets
strategist at AxiCorp.
Major U.S. cities were cleaning up streets strewn with
broken glass and burned out cars as curfews failed to stop
confrontations between activists and law enforcement.
Protesters have flooded streets after weeks of lockdowns
during the coronavirus pandemic that threw millions out of work
and hit minority communities especially hard. The turmoil was a fresh setback for the economy which was
only just emerging from a downturn akin to the Great Depression.
Following poor data on spending and trade out on Friday, the
Atlanta Federal Reserve estimated economic output could drop a
staggering 51% annualised in the second quarter.
The May jobs report due out on Friday is forecast to show
the unemployment rate surged to 19.8%, smashing April's record
14.7%. Payrolls are expected to drop by 7.4 million, on top of
the 20.5 million jobs lost the previous month.
"Current unemployment numbers go far beyond what has been
experienced in any post-war recession," wrote Barclays economist
Christian Keller in a note.
"To the extent that some sectors may never return to
pre-pandemic business-as-usual, labour faces a substantial
challenge to reallocate workers," he added. "Such a process
could be a matter of years rather than months or quarters and in
the meantime it would weigh on consumer demand."
In Asia, an official business survey from China over the
weekend showed its factory activity grew at a slower pace in May
but momentum in the services and construction sectors quickened,
pointing to an uneven recovery.
Bond investors suspect economies will need massive amounts
of central bank support long after they reopen and that is
keeping yields super low even as governments borrow much more.
Yields on U.S. 10-year notes US10YT=RR were trading at
0.66% having recovered from a blip up to 0.74% last month when
the market absorbed a tidal wave of new issuance.
The decline in U.S. yields has been a burden for the dollar,
but the world's reserve currency also tends to benefit from
safe-haven status to limit the losses.
Early Monday, the dollar was a fraction softer on a basket
of peers at 98.223 =USD having touched an 11-week low of
97.944 on Friday. It was steady on the yen at 107.76 JPY= .
Much of the dollar's recent decline has come against the
euro which has been broadly boosted by plans for an EU stimulus
package. The single currency was last at $1.1114 EUR= after
climbing 1.8% last week.
Markets are awaiting a meeting of the European Central Bank
on Thursday where it is widely expected to raise its asset
buying by around 500 billion euros to 1.25 trillion.
In commodity markets, oil prices started soft on worries
about U.S. demand, but found some support from reports Russia
had no objection to the next meeting of OPEC and its allies,
known as OPEC+, being brought forward to June 4 from the
following week. Brent crude LCOc1 futures were off 8 cents at $37.76 a
barrel, while U.S. crude CLc1 dipped 13 cents to $35.36. O/R

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Stephen Coates)