GLOBAL MARKETS-Stocks head for higher ground, Italian bond stress eases

* Economic indicators point to deep recession
* European shares gain 1%, Wall Street pointing higher
* Italian bonds rally, euro makes ground on ECB support talk
* Weekly U.S. jobless claims top 5.2 million
* Oil stuck near 18-year low
* Benchmark bond yields nudge higher

By Marc Jones
LONDON, April 16 (Reuters) - Europe led world stock markets
back to higher ground on Thursday as tentative moves to reopen
parts of the some of its larger coronavirus-hit economies and a
bounce in oil offset some truly dismal global economic data.
Traders seemed determined to show more resilence to the
torrent of gloomy figures having been sideswiped by the previous
day's IMF warning of a Great Depression-style world slump and
record plunge in U.S. retail sales.
The pan-European STOXX 600 index .STOXX batted off equally
grim UK retail figures and more warnings of
countries facing double-digit recessions to rise 1%
.EU , while Wall Street futures were 0.8% up ESc1 despite
another sky-high jump in U.S. jobless claims. .N
In the currency and bond markets both the euro EUR= and
Italy's bonds got a lift while speculation mounted that the
European Central Bank was looking to prevent further stress in
the country's debt markets where debt-to-GDP now looks set to
top 150% this year. /FRX GVD/EUR
"We have had this big wave of big announcements by
governments and central banks and now we need to get into the
nitty gritty of how it all works," said AXA Investment Managers
chief economist Gilles Moec.
"We need to see if it is working, how it is working and if
we need to do more," adding that the speed of the recent rise in
Italian bond yields had been concerning for the euro zone.
Markets may be seizing on the fact that policymakers,
however reluctantly, are starting to allow stringent lockdowns
to ease.
Germany is proposing to reopen schools and some retailers
starting May 4, while around 20 U.S. states spared the worst of
the coronavirus pandemic may start reopening their economies by
President Donald Trump's May 1 target date.
Firms are looking to restart as well. German carmakers
Volkswagen VOWG_p.DE and Mercedes-Benz DAIGn.DE will restart
production at some German factories next week an in other
countries a week later. But the economic figures are dire. After the IMF's forecasts
for this year, markets are expecting China to report on Friday
that Q1 GDP contracted for the first time on record, and hopes
for a quick rebound are fading fast. A Reuters survey showed that most Japanese firms feel
stimulus announced so far is insufficient and Wednesday's U.S.
data also showed manufacturing output there dropping the most in
over 74 years.
Investment bank Morgan Stanley MS.N underscored the damage
too as it posted a 32% fall in its quarterly profit on Thursday.
CLAMBERS OUT OF RUT
Asia had had a more difficult session overnight. Tokyo's
Nikkei dropped 1.3% and MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS lost almost 1%, wiping out
early week gains that had taken it to a one-month high. >T
The risk-sensitive Australian dollar AUD=D3 fell to a
one-week low and commodity prices had struggled to rise against
the expectation of cratering demand. MET/L
Things turned in Europe though as the mood improved. Both
Brent LCOc1 and U.S. crude futures CLc1 sprang up $1 to
$28.75 and $20.22 per barrel respectively on hopes that the big
build-up in stockpiles will level producers with little option
but to deepen output cuts. O/R
The International Monetary Fund is predicting zero growth in
Asia this year for the first time in 60 years, as exporters are
pounded by slumping demand and anti-virus measures force
consumers to stay home and shops to shut down. Swiss bank Julius Baer's Head of Economics Norbert Ruecker
said "oil prices must remain depressed to force shut-ins among
non-cartelised producers," such as the United States, where much
production is not economic at current prices.
"We stick to our Neutral view and see prices continuing to
swing wildly around current levels in the very near term," he
added.
Benchmark indexes in Australia .AXJO , Hong Kong .HSI and
Shanghai .SSEC also posted falls between 0.4% and 1.3% and
some emerging markets fell harder. .AX .HK .SO
"A recovery timeline ... remains impossible to predict,"
said Ronald Lam, chief customer officer at airline Cathay
Pacific 0293.HK , which has slashed nearly all its passenger
capacity and lost a fifth of its value this year.