* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, May 25 (Reuters) - Stocks edged higher on Monday
after a survey showed German business morale rebounded in May,
boosting optimism around economic re-openings, although caution
prompted the dollar to snap a rare losing streak.
MSCI's gauge of world stocks .MIWD00000PUS gained 0.32%.
The pan-European STOXX 600 index .STOXX climbed 0.8%.
Lockdown measures introduced in mid-March have put the
global economy on track for a recession this year. Only
unprecedented stimulus by global central banks held up world
markets in recent weeks.
With nervous investors wary of adding to their equity
holdings over concerns on what a post-lockdown world would look
like, Germany's Ifo institute survey for May gave some relief.
Its business climate index rose to 79.5 from a downwardly
revised 74.2 in April, higher than a Reuters poll had forecast,
and fueling optimism about the outlook of Europe's biggest
economy after a drop in the first quarter "Today's Ifo index echoes more real-time signals that
economic and social activity has started to pick up
significantly since the first lifting of the lockdown measures
in late April," ING economists said in a note.
"In short, the low point of the slump should now be behind
us and there even is the chance for a short-lived strong rebound
in the coming months."
But with financial markets in Singapore, Britain and the
United States closed for public holidays on Monday, market moves
were relatively small and held within well-worn ranges.
U.S. stock futures ESc1 gained 1%. MSCI's index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.3%
higher on thin volume.
DOLLAR GAINS
The bullishness in the stock markets contrasted with caution
in currency markets, where the dollar ended a rare weekly loss
to rise to a one-week high against its rivals.
The dollar =USD , which tends to behave like a safe-haven
asset during market turmoil and political uncertainty, gained
after China's move to impose a new security law on Hong Kong
heightened concerns about the stability of the city and global
trade prospects.
Investors were rattled on Friday when Beijing announced
details of the security legislation, which critics see as a
turning point for the territory. Sino-U.S. ties have worsened since the coronavirus outbreak,
with the administrations of President Donald Trump and President
Xi Jinping trading barbs over the pandemic, including
accusations of cover-ups and lack of transparency.
"Rising tensions between the U.S. and China around Hong
Kong, trade policy and who is responsible for the 2020 economic
dislocation are threatening to end the post March-trough rally,"
said Perpetual analyst Matthew Sherwood.
Bond markets were stable with Italy's 10-year yield at 1.60%
IT10YT=RR , just off six-week lows hit on Friday, and
safe-haven German 10-year yields down 1 basis point at -0.50%.
DE10YT=RR
Meanwhile, U.S. crude oil CLc1 rose 32 cents, or 1%, to
$33.57 a barrel. Brent crude LCOc1 was up 9 cents, or 0.26%
higher, at 35.22. O/R
Spot gold was off 0.3% at $1,729.2 an ounce XAU= .
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