GLOBAL MARKETS-European shares lack direction; Wall Street set for stronger open

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Reuters Live Markets blog: LIVE/

(Updates prices, adds comment)
By Elizabeth Howcroft
LONDON, Oct 20 (Reuters) - Shares recouped some of their
early losses on Friday and the dollar hit a one-week low but
held in recent ranges, as cautious investors adjusted risk
exposure before the U.S. election and record COVID-19 cases in
Europe weighed on sentiment.
The MSCI world equity index, which tracks shares in 49
countries, was flat on the day at 1057 GMT .MIWD00000PUS .
Europe's STOXX 600 .STOXX was also flat, having fallen in
early trading as fears about the economic impact of lockdown
restrictions outweighed some strong earnings, while MSCI's main
European Index was up 0.3% .MSER With two weeks until the U.S. presidential elections,
analysts said investors were reining in their riskier bets.
"Ultimately investors don't really know which way to push
this market. Things aren't bad enough to go completely risk-off
simply because there's an expectation that we will get some form
of further stimulus some day in the future," said Michael
Hewson, chief market analyst at CMC Markets UK.
"This close to presidential election, if you're wise, you'll
sit on your hands."
U.S. stock futures were up, pointing to more bullishness in
Wall Street. S&P 500 E-minis were up 0.8% at 1110 GMT EScv1
and Dow E0minis rose 0.7% 1YMcv1 .
Analysts generally expect more fiscal stimulus from
Washington after the elections if Democratic candidate Joe Biden
- who is ahead in the polls - wins.
Biden and President Donald Trump will debate each other in
an event on Thursday which will feature a mute button to allow
each candidate to speak uninterrupted. U.S. fiscal stimulus talks were also in focus, as House
Speaker Nancy Pelosi set the end of Tuesday as a self-imposed
deadline for reaching a deal on a coronavirus aid package.
Pelosi said over the weekend she was optimistic legislation
could be pushed through before the election. CAUTION
In Europe, tougher restrictions to limit the spread of the
pandemic suppressed risk appetite.
Ireland announced some of Europe's strictest curbs on
Monday, telling people not to travel more than five
kilometres(three miles) from home. New restrictions were also
approved in the Lombardy region of Italy. France reported a large increase in the number of people
hospitalised with the coronavirus. The dollar fell against a basket of currencies, touching its
lowest levels in a week. At 1103 GMT, it was down 0.2% on the
day at 93.19 =USD . Riskier currencies including as the Aussie
and Kiwi dollars were down, but the safe-haven yen also slipped.
The pound edged down versus the euro, as Brexit negotiations
appeared stuck in limbo. The British government has said it sees
no basis to restart the talks with the European Union unless
there is a fundamental change in approach.
Euro zone government bond yields rose, with the benchmark
10-year German yield retreating from recent seven-month lows at
-0.613% DE10YT=RR .
Gold edged down while oil prices were little changed after
three days of declines on fears that a resurgence of COVID-19
infections would stifle the recovery in fuel demand.
Brent crude LCOc1 futures were trading down up 0.1% at
$42.66 a barrel by 1107 GMT, recovering ground after falling as
low as $42.19 earlier in the session.

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