* European shares soft as vaccine advances digested
* Euro zone economic data highlights COVID pain
* U.S. stimulus package, Brexit trade talks eyed
* U.S. dollar hits fresh 2 1/2-year lows
By Huw Jones
LONDON, Dec 3 (Reuters) - European shares opened lower on
Thursday after gains spurred by advances in vaccines to fight
COVID-19, but data across Europe underscored the economic damage
still being caused by the pandemic.
Markets were keeping an eye on talks between Britain and the
European Union on a trade deal, with less than a month to go
before the UK's full departure from the EU.
Global stocks reached record highs, sending the dollar lower
as investor appetite for riskier assets was whetted by news that
Britain would start rolling out a COVID-19 vaccine next week,
lifting prospects for economic recovery.
The dollar index slipped to a two-and-a-half-year low of
90.948 =USD on Thursday and was last at 90.968. The MSCI's
gauge of stocks across the globe .MIWD00000PUS hit another
record high.
"The UK stole a march on the rest of Europe and we had a
little bit of a feel-good factor yesterday. I am a lot more
optimistic about equity markets than I was a month ago," said
Michael Hewson, chief market analyst at CMC Markets.
The STOXX index .STOXX of European companies was flat,
dragged down by a 0.2% drop in Frankfurt .GDAXI and Paris
.FCHI blue chips. The FTSE 100 .FTSE hit June highs.
Investors hope that a fresh round of weak economic data in
Europe and the United States will finally persuade policymakers
to agree the stimulus packages that have so far eluded them.
There is still no deal yet in the U.S. Congress on a $908
billion boost to the world's biggest economy, and the EU has yet
to nail down an economic package agreed in principle as the euro
zone economy struggles. The IHS Markit Purchasing Managers' Index (PMI) for November
in Spain shrank to 39.5 - below the 50 level separating growth
from contraction. Italy's services contracted for a fourth month
running, with the IHS Markit Business Activity Index for
services dropping to 39.4.
CMC's Hewson said such figures were "abysmal" and likely to
remain below 45 until January.
A Reuters polls forecast the euro zone economy would shrink
again this quarter as renewed lockdown measures stifled
activity, with the economy taking two years to regain pre-crisis
levels. Euro zone government bonds held ground on Thursday with
Germany's 10-year bund yield down about 1 basis point to
-0.53% DE10YT=RR .
BREXIT END GAME
Britain's education minister, Gavin Williamson, said good
progress was being made in talks with the European Union on a
trade deal as the Brexit deadline approaches. Irish Foreign
Minister Simon Coveney said he believed there was a good chance
of a deal within days. Sterling GBP=D3 clung on to $1.34 thanks to broad dollar
weakness, but derivative markets were flashing red on doubts
that Britain can strike a Brexit trade deal with the EU before
the UK's exit from the single market on Dec. 31.
Asian shares were mixed on Thursday after a choppy day of
Wall Street trade, thanks in part to a disappointing U.S. jobs
report.
The U.S. Food and Drug Administration is holding its
advisory committee meeting next week, while New York Governor
Andrew Cuomo has said the state's first vaccine delivery, enough
for 170,000 residents, is expected on Dec. 15.
Hopes that the pandemic will finally be brought under
control sparked a risk-on rally in currency markets with the
Australian and New Zealand dollars advancing. AUD=D3 NZD=D3
"Currency investors are taking on more risk following the
latest vaccine breakthroughs, options show," Morgan Stanley said
in a note.
E-Mini futures for S&P500 ESc1 were flat.
In Asia, Japan's Nikkei .N225 was unchanged while South
Korea's KOSPI .KS11 and Australia's benchmark index .AXJO
were about 0.4% higher each. Chinese shares opened lower, with
the blue-chip CSI300 index .CSI300 off 0.2%. New Zealand
shares .NZ50 were weaker, too.
Overnight, Wall Street eventually ended higher. The Dow
Jones .DJI and the S&P 500 .SPX gained 0.2%. The tech-heavy
Nasdaq .IXIC was little changed moved.
In commodities, oil prices slipped on Thursday as producers
including Saudi Arabia and Russia locked horns over the need to
extend record production cuts set in place in the first wave of
the COVID-19 pandemic. O/R
Brent crude LCOc1 was down 9 cents at $48.16 a barrel
while U.S. light crude CLc1 eased 14 cents to $45.14.
Gold was up at $1,832.6 an ounce XAU= .
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>