Gold prices edge higher on raised Fed rate cut hopes
By David Randall
NEW YORK, April 30 (Reuters) - World equity benchmarks
dipped on Thursday yet remained on pace for their best month on
record as a rebound in oil prices, encouraging early results
from a COVID-19 treatment trial and expectations of more
government stimulus helped ease the pain of February and March.
Safe haven assets including the dollar and government bonds
rose, reflecting an unsettled market as concerns about
containing the coronavirus pandemic and jobs data in the United
States were worse than expected.
"It's a hope-based rally rather than an evidence-based
rally," said Anthony Doyle, cross-asset specialist at fund
manager Fidelity International in Sydney.
There were still worries about a second wave of infections,
Doyle said, adding that huge piles of cash waiting to go back
into the markets suggest investor confidence remained nervous.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.53% following broad gains in Asia that pushed Japan's Nikkei
.N225 to a seven-week high as well as declines in Europe.
The index is on pace for its best month since it launched in
the late 1980s. In early trading on Wall Street, the Dow Jones Industrial
Average .DJI fell 313.38 points, or 1.27%, to 24,320.48, the
S&P 500 .SPX lost 27.72 points, or 0.94%, to 2,911.79 and the
Nasdaq Composite .IXIC dropped 25.57 points, or 0.29%, to
8,889.14.
"We have gone back to a turbo-charged version of the great
financial crisis," said Simon Fennell, a portfolio manager in
William Blair's global equity team, referring to how markets
have surged on mass central bank and government stimulus.
Declines in the equity market came on the heels of a strong
finish on Wall Street Wednesday after partial results from a
trial of Gilead's GILD.O antiviral drug remdesivir suggested
it could help speed recovery from COVID-19, the respiratory
disease caused by the new coronavirus. Partial results from the 1,063-patient U.S. government trial
of Gilead's remdesivir were hailed as "highly significant" by
the top U.S. infectious disease official, Anthony Fauci.
They showed hospitalized COVID-19 patients given the drug
recovered in 11 days, compared with 15 days for patients given a
placebo, and a slightly lower death rate.
But since treatment hopes do not seem to take into account
regulatory and distribution difficulties, should a treatment be
found, currency and bond markets were more circumspect.
"Any positive medical development is helpful," said Westpac
FX analyst Sean Callow. "But no one should be counting on a
major breakthrough - the key for markets is control of the
spread of the virus."
A rise in U.S. unemployment claims helped bolster safe haven
assets. Benchmark 10-year notes US10YT=RR last rose 9/32 in
price to yield 0.5999%, from 0.627% late on Wednesday.
Initial claims for state unemployment benefits totaled a
seasonally adjusted 3.839 million for the week ended April 25,
the U.S. government said. That was down from 4.442 million in
the prior week. Commodities were also set to close the month significantly
higher. Gold is set for its best month in four years GOL/ and
copper, which is seen as a something of a bellwether of global
industry, was on track for its best performance since December
2017. MET/L
Hope that demand could soon return helped push oil prices
broadly higher. U.S. crude CLc1 recently rose 13.48% to $17.09
per barrel and Brent LCOc1 was at $25.27, up 12.11% 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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