GLOBAL MARKETS-Rising U.S. coronavirus cases hurt stocks, push debt yields lower

(Adds U.S. market open, byline; previous LONDON)
* Escalating U.S-China tensions, data weigh on markets
* Oil prices fall on agreement to ease supply curbs
* Gold prices ease as ECB keeps policy on pause

By Herbert Lash
NEW YORK, July 16 (Reuters) - Government debt yields and
global equity markets fell on Thursday as a surge in U.S.
coronavirus cases weighed on risk sentiment that also was hurt
by deteriorating U.S.-China relations and worse-than-expected
Chinese retail sales.
Asian stock markets and the Chinese yuan CNY= fell as
China grappled with the pandemic and with heightened tensions
with the United States over trade, technology and geopolitics.

The risks to China's economic outlook were partly reflected
in data that showed Chinese consumers kept their wallets tightly
shut in June. Retail sales slid 1.8%, the fifth month of decline
and worse than a forecast for 0.3% growth last month.
On Wall Street, the S&P 500 slipped from a five-week high as
data showing elevated levels of U.S. unemployment claims
highlighted concerns about the economic toll from rising U.S.
coronavirus cases.
U.S. stocks are taking a pause after a strong run-up in
recent days, said Jon Adams, senior market strategist at BMO
Global Asset Management in Chicago.
"There is a bit more concern today at least around the
resurgence of the virus, and initial jobless claims were a bit
higher than expectations," Adams said.
"We do think we might see a pause in the resumption of
economic recovery that we've seen over the last couple of
months," he said.
MSCI's world equity index .MIWD00000PUS , which tracks
shares in 49 nations, fell 0.8% to 545.39.
On Wall Street, the Dow Jones Industrial Average .DJI fell
0.4%, the S&P 500 .SPX lost 0.67% and the Nasdaq Composite
.IXIC dropped 1.41%.
U.S. retail sales rose a better-than-expected 7.5% in June.
But Labor Department data showed 1.30 million people filed for
state unemployment benefits during the week ending July 11,
slightly down from the prior period. Treasury yields fell and gold eased, though it remained
above $1,800 an ounce. The 10-year Treasury note US10YT=RR
fell 2.8 basis points to yield 0.602%.
Spot gold prices XAU= fell 0.31% to $1,805.67.
China accused the United States of "gangster logic" after
President Donald Trump ordered an end to Hong Kong's special
status under U.S. law in response to China's imposition of new
security legislation on the former British colony. The United States also said it was studying the national
security risks of social media applications including China's
TikTok and WeChat. China said it would respond to "bullying" tactics from
Washington, but that it would stick to the Phase 1 trade deal
the countries reached last year. In currency markets the euro EUR= , which hit a four-month
high of $1.1452 on Wednesday, rose 0.16% at $1.1428. The dollar
index =USD fell 0.071% at $95.9240 and the yen JPY= was up
0.14% at $107.0700.
Economic activity in the 19-country euro zone had shown
signs of a "significant, though uneven and partial recovery,"
European Central Bank President Christine Lagarde said.
But the outlook remained uncertain amid risks of a second
wave of infections and the ECB will use its stimulus firepower
fully even as the euro zone economy shows some signs of
rebounding from its pandemic-induced recession, Lagarde said.
Oil prices eased after OPEC and allies such as Russia agreed
to taper record supply curbs from August, though the drop was
cushioned by hopes for a swift pick-up in U.S. demand after a
big drawdown from the country's crude stocks. Brent crude LCOc1 fell 0.14% at $43.73 a barrel. U.S.
crude CLc1 slid 0.27% at $41.09 a barrel.

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