Gold prices edge higher on raised Fed rate cut hopes
By David Randall
NEW YORK, May 14 (Reuters) - World stock markets fell for a
third day on Thursday and safe-haven bonds rose as disappointing
U.S. jobs data and signals by central banks that further
government stimulus may be needed stoked investor concerns about
the global economic recovery.
Stock markets have rallied more than 30% since their March
lows following unprecedented government stimulus measures and
central bank interventions to the blow of economic lockdowns.
Federal Reserve Chairman Jerome Powell quashed talk of U.S.
interest rates going negative to kickstart investment.
Like the Fed, Bank of England chief Andrew Bailey said
Thursday it wasn't considering "the very big step" of sub-zero
rates while the Bank of Japan said it wasn't
planning to go even deeper into negative territory.
"It's a relatively risk-off day again," said Societe
Generale's Kit Juckes, highlighting that as well as Powell, the
top U.S. infectious diseases expert Anthony Fauci had warned
that getting the novel coronavirus outbreak under control would
take time.
"I think there is a sense of realization that the steep
V-shaped recovery isn't going to happen," Juckes added. "But a
third day of this (selling) might make people optically looking
at the equity charts a bit worried."
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
1.51% following broad declines in Europe and Asia.
In morning trading on Wall Street, the Dow Jones Industrial
Average .DJI fell 253.64 points, or 1.09%, to 22,994.33, the
S&P 500 .SPX lost 31.19 points, or 1.11%, to 2,788.81 and the
Nasdaq Composite .IXIC dropped 82.57 points, or 0.93%, to
8,780.60.
In the U.S., initial claims for state unemployment benefits
totaled a seasonally adjusted 2.981 million for the week ended
May 9, the Labor Department said on Thursday, nearly 500,000
more than anticipated by economists polled by Reuters
"The stock market has given the bad economic data a pass
ever since the Federal Reserve and Federal government stepped in
with massive amounts of stimulus in March, but the tide seems to
be turning and markets could take another leg lower as the
headline numbers continue to jolt investors," said Chris
Zaccarelli, chief investment officer for Independent Advisor
Alliance.
Safe haven assets such as the dollar and government bonds
edged higher. The dollar index =USD rose 0.24%, with the euro
EUR= down 0.22% to $1.0792. Benchmark 10-year notes
US10YT=RR last rose 8/32 in price to yield 0.625%, from 0.651%
late on Wednesday
China has reimposed movement restrictions near its borders
with North Korea and Russia after a new outbreak was detected
there and South Korea was working to contain an outbreak
centered around bars and nightclubs in Seoul.
"It is important to put this on the table: this virus may
become just another endemic virus in our communities, and this
virus may never go away," WHO emergencies expert Mike Ryan told
an online briefing on Wednesday. A dip in U.S. crude stockpiles helped push oil prices higher
The International Energy Agency (IEA) estimated
oil demand will see a record fall in 2020 keeping
Brent just below $30 a barrel. O/R
U.S. crude CLc1 recently rose 3.08% to $26.07 per barrel
and Brent LCOc1 was at $30.07, up 3.01% on the day.
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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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