GLOBAL MARKETS-Asia stocks cautiously mixed, dollar tries to bounce

© Reuters.

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asia ex-Japan dips, Nikkei aided by yen pullback
* Caixin China PMI beats forecasts at 52.8
* Dollar adds to Friday bounce, after punishing July
* Gold reaches new peak, eyeing $2,000 level

By Wayne Cole
SYDNEY, Aug 3 (Reuters) - Asian share markets turned mixed
on Monday as U.S. lawmakers struggled to hammer out a new
stimulus plan amid a global surge of new coronavirus cases,
though a squeeze on crowded short positions gave the dollar a
rare bounce.
Sentiment was helped by a survey showing China's factory
activity expanded at the fastest pace in nearly a decade in
July, with the Caixin/Markit PMI at 52.8. That lifted Chinese blue chips 0.9% .CSI300 . MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS dipped 0.2%, though that was from a six-month
top.
Japan's Nikkei .N225 added 2.1% courtesy of a pullback in
the yen, while South Korea shares .KS11 were flat.
E-Mini futures for the S&P 500 ESc1 inched up 0.1%, while
EUROSTOXX 50 futures STXEc1 and FTSE futures FFIc1 were
little changed.
Investors were nervous at the lack of a new stimulus package
in the United States with White House Chief of Staff Mark
Meadows not optimistic on reaching agreement soon on a deal.
On Friday, Fitch Ratings cut the outlook on the United
States' triple-A rating to negative from stable, citing eroding
credit strength and a ballooning deficit. The credit rating agency also said the future direction of
U.S. fiscal policy depends in part on the November election and
the resulting makeup of Congress, cautioning there is a risk
policy gridlock could continue.
Strong results from tech giants helped the S&P 500 climb 5.5%
last month, while the NASDAQ rose 6.8%. Other sectors, however,
did not fair nearly as well as many states rowed back on opening
their economies in the face of surging infections. .N
"Amid improvements in business sentiment, signals are
emerging that the initial boost from pent-up demand is fading
and consumer confidence is slipping lower," wrote economists at
Barclays in a note.
"Together with concerns about labour market and virus
developments, this clouds the outlook and could be exacerbated
if U.S. fiscal support is not renewed in time."
Much will depend on what key data show this week including
the ISM survey of manufacturing later on Monday and the crucial
payrolls report on Friday.
The uncertainty saw benchmark 10-year Treasury yields
US10YT=RR hit their lowest since March at 0.52% last week and
were currently just a fraction higher at 0.55%.
The 10-year real rate has broken below -1% for the first
time amid a marked flattening of the yield curve as investors
wager on yet more accommodation from the Federal Reserve.
That took a heavy toll on the U.S. dollar which suffered its
worst monthly drubbing in a decade in July, though it was
attempting a rally on Monday as bears took profits on crowded
short positions. USD/
The dollar was last at $1.1758 per euro EUR= , with the
single currency having gained 4.8% in July to stretch as far as
$1.1908. Against a basket of currencies, the dollar stood at
93.566 having touched its lowest since May 2018 on Friday at
92.538.
The dollar regained a little ground on the yen to 106.01
JPY= after hitting a 4-1/2-month low last week at 104.17.
It had bounced in part when Japanese Finance Minister Taro
Aso described the yen's recent rise as "rapid", signalling
concern that a strong currency could add pain to an export-led
economy already in recession. L3N2F21AN
The decline in the dollar combined with super-low real bond
yields has been a boon for gold, which boasted its biggest
monthly gain since February 2016.
The metal made a fresh peak early Monday at $1,984 an ounce
XAU= and seemed on track to take out $2,000 soon. GOL/
Oil prices eased on concerns about oversupply as OPEC and
its allies, together known as OPEC+, are due to pull back from
production cuts in August while an increase in COVID-19 cases
worldwide raised fears of slower pick-up in fuel demand. O/R
Brent crude LCOc1 futures dipped 7 cents in early trade to
$43.45 a barrel, while U.S. crude CLc1 eased 8 cents to
$40.19.

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(Editing by Lincoln Feast and Sam Holmes)