GLOBAL MARKETS-Stocks shake off stimulus doubts, gold goes wild

* U.S. gridlock on stimulus deal dents share prices
* Russia vaccine news triggers escape from safe-haven assets
* Value-oriented shares bought back globally
* Gold, silver tumble for two days in row
* European shares seen falling 0.6%

By Marc Jones
LONDON, Aug 12 (Reuters) - Europe's stock markets held their
own on Wednesday after doubts emerged about fresh U.S. stimulus,
while it was shaping up to be another wild day for gold and
silver and Turkey's troubled lira.
A lively start to European trading saw sterling shrug at
news Britain had seen is worst economic quarter on record thanks
to COVID-19 Gold swung almost 4% after its biggest
fall in seven years GOL/ and German Bund yields hit two-week
highs amid a deluge of global debt issuance. GVD/EUR
Turkey's volatile lira took another 1.5% pounding TRYTOM=
as concerns about its economic health and policy making took
hold again, while New Zealand dollar's dropped 0.4% NZD=D4
after its central bank signalled it would stay highly
supportive. Mixed sentiment had dragged on Asian stocks as sniping
continued between China and the United States had also reported weaker-than-expected loan growth
while the U.S. Senate's majority leader described
stimulus talks there overnight as "at a bit of a stalemate".
"The bias at moment is probably to fade the S&P 500 and fade
risk generally," said Societe Generale strategist Kit Juckes.
"What happens next probably depends on what happens in U.S.
equity markets (which are focused on stimulus)... That might be
the decisive factor for short-term sentiment."
On Wall Street on Tuesday, the S&P 500 snapped a seven-day
winning streak after coming within reach of its all-time peak
hit in February just before the global outbreak of the COVID-19.
.N
Barring a bipartisan deal on stimulus, the U.S. economy
could be left with measures U.S. President Donald Trump called
for on Saturday through executive orders to bypass Congress.
"We have enormous uncertainty. It appears it's getting
harder for both sides to compromise as the election is
nearing... Trump's proposals would be smaller than markets have
expected. There's question over whether they are viable, too,"
said Junpei Tanaka, strategist at Pictet.
The U.S. election campaigns look set to gather steam after
Democratic presidential candidate Joe Biden selected Senator
Kamala Harris as his choice for vice president. The 10-year U.S. Treasuries yield climbed a couple of basis
points to 0.67% US10YT=RR in Europe to stay at a one-month
high.
The 10-year yield (+6.6bps) and 30-year (+7.5bps) yields saw
their biggest increases in over a month on Tuesday, while the
2s10s curve steepened 4.6 basis points, the most since June 5th.
The gap between U.S. two-year and 10-year Treasury yields is a
metric closely watched for signs of a slowdown.
On top of hedge selling ahead of the largest-ever 10-year
note auction later in the day, bonds have also lost some of
their safe-haven allure on rising hopes of vaccines against
COVID-19.
Russian President Vladimir Putin said on Tuesday his country
was the first to grant regulatory approval to a COVID-19 vaccine
after less than two months of human testing. While Moscow's decision raised some eyebrows, the news
lifted hope some of the vaccines currently in development would
become available earlier than expected. Oil prices edged up after bigger-than-expected drop in U.S.
inventories, with Brent LCOc1 up 0.6% at $44.75 a barrel. U.S.
crude CLc1 was up 0.5% at $41.80.
The most dramatic move took place in precious metals though.
Gold swung from being down 2% to being up 1.7% at $1,935 per
ounce XAU= , a day after it suffered its biggest daily fall in
seven years. Silver was even more wild, rising nearly 4% in
Europe after a 15% plunge on Tuesday. XAG= GOL/R

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