GLOBAL MARKETS-European shares rise on economic awakening; oil and gold jump

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* U.S. West Texas Intermediate crude hits two-month high
* Gold hits seven-year peak
* FTSE 100 and Stoxx 600 up 2%
* For Reuters Live Markets blog on European and UK stock
markets,
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By Elizabeth Howcroft
LONDON, May 18 (Reuters) - European stock markets rose on
Monday and oil prices climbed to their highest in more than a
month as a loosening of coronavirus shutdowns boosted market
sentiment, even as the deadly outbreak has yet to be fully
contained.
Warm weather is enticing much of the world to emerge from
coronavirus lockdowns as centres of the outbreak from New York
to Italy and Spain gradually lift restrictions that have kept
millions cooped up for months. However, the weekend also saw anti-lockdown protestors in
countries such as the United States, Germany, England and Poland
arguing the government restrictions demolish personal liberties
and are wrecking economies. Governments must balance the economic incentive to re-open
businesses and allow people to go out and about with the risk of
triggering a deadly second wave of the virus, which has killed
more than 300,000 people and spread to at least 210 countries.
"It does feel like we're in the middle of a phoney war at
the moment with all of us waiting to see how efficiently the
various economies are able to re-open given all the social
distancing that will be required," said Jim Reid, a Deutsche
Bank strategist.
The pan-European STOXX 600 .STOXX was up 1.9% at 0810 GMT,
with heavyweight bourses in Britain .FTSE , Germany .GDAXI
and France .FCHI all comfortably in positive territory.
There were still lots of obstacles to a rapid recovery,
however, with Federal Reserve Chairman Jerome Powell saying in
an interview on Sunday that a U.S. economic recovery may stretch
deep into 2021. The most important data for the U.S. economy now are the
"medical metrics" around the coronavirus pandemic, he said.
Already rocky U.S.-China relations also saw tensions
increase over the weekend, as the United States raised threats
over telecoms equipment giant Huawei Technologies HWT.UL and
China's treatment of journalists in Hong Kong. U.S. lawmakers and officials are crafting proposals to push
American companies to move operations or key suppliers out of
China that include tax breaks, new rules, and carefully
structured subsidies. Japan's preliminary GDP data showed that the world's third
biggest economy contracted an annualised 3.4% in the first
quarter, slipping into a recession for the first time in more
than five years. But hopes of a worldwide economic recovery saw oil prices
climb by more than $1 a barrel on Monday, supported by output
cuts. Brent crude reached as much as $33.98 a barrel on Monday,
its highest since April 13, and was last up 3.9% at $33.72
LCOc1 . U.S. West Texas Intermediate crude CLc1 was up 5.4%
at $31.03 a barrel, having reached a two-month high earlier in
the session.
In commodity markets, the flood of liquidity from central
banks, combined with record-low interest rates and poor economic
data from the U.S., lifted gold to a seven-year peak. The metal
was last up 1.2% at $1,762 an ounce XAU= , with silver and
palladium also boosted. GOL/ The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up around 0.4% while MSCI's main
European Index .MSER was up 2%.
Government bond yields edged higher across the euro area,
while French bonds saw some underperformance after its ratings
outlook was lowered by Fitch Ratings. Europe's biggest budget airline, Ryanair, reported a 13%
rise in profit for the year to March 31 RYA.I , but cut its
annual passenger traffic target by a further 20% and said it had
"no visibility" on customer demand once it reopens much of its
network on July 1. Ryanair shares were last up 6.9%.
The dollar fell slightly against a basket of six major
currencies .DXY .
The Norwegian crown was lifted by the rising oil prices, up
around 0.7% versus the euro EURNOK=D3 . Sterling fell below $1.21 - its lowest since March 26 - late
on Sunday after the Bank of England's chief economist said the
bank is looking more urgently at options such as negative
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