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GLOBAL MARKETS-Trump stimulus threat puts holiday-thinned markets on edge

Published 23/12/2020, 07:51
© Reuters.
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* Trump calls long-awaited stimulus bill "a disgrace"
* S&P 500 futures wobble lower; Asia stocks gain anyway
* Virus mutation worries weigh on commods, support dollar

By Tom Westbrook
SINGAPORE, Dec 23 (Reuters) - Stock futures wobbled and
commodities fell on Wednesday after U.S. President Donald Trump
threw a last-minute spanner into pandemic relief plans, although
Asian equities rose as traders looked through fears about an
infectious new coronavirus strain.
In a video posted on Twitter, Trump said a stimulus bill,
agreed after months of wrangling in Congress, was "a disgrace"
and that he wanted to increase "ridiculously low" $600 checks
for individuals to $2,000. The possibility of a delay to such long-awaited and
hard-fought spending plans sent S&P 500 futures ESc1 down as
far as 1% below the index's Tuesday close, though they recovered
to sit about 0.3% below the close.
FTSE futures FFIc1 fell 0.2% and EuroSTOXX 50 futures
STXEc1 fell 0.1%, while oil futures dropped 1.5% to re-test
lows from Monday when coronavirus worries drove a sharp selloff.

Treasuries also caught a bid, with ten-year U.S. Treasury
futures TYc1 up two ticks in the Asia session and the yield on
U.S. 10-year government bonds US10YT=RR down one basis point.
"Personally we think the President will sign the bill at the
last possible moment," said Andrew Brenner, head of
international fixed income at NatAlliance, in a note emailed
after Trump's message.
"But the true reality star will wait until the end," he
said. "Bond markets close 2 p.m. Thursday while stocks close at
1 p.m. - it may go down to the last moment."
Some traders said Trump's push for higher stimulus could
lead to a spending increase.
The bill could be amended if congressional leadership wants
to do so, and if they don't, Trump's choices are to sign the
bill into law, veto it, or do nothing and let it become law.
The stimulus funds are needed as the U.S. recovery stalls
and hospitals struggle to cope with a nationwide spike in
infections at the same time as an even more contagious variant
of the coronavirus spreads quickly in England.
The U.S. dollar clung to Tuesday's gains in thin trade,
though signs that a small virus outbreak in Sydney could be
contained gave the Australian dollar AUD=D3 a small boost.
AUD/
Asia's stock markets posted broad, if patchy, gains as
investors focused on domestic economic strengths.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS snapped three days of declines with a 0.6% rise,
led by jump in electric vehicle stocks in South Korea and China
after LG Electronics announced a production deal. Tech and healthcare stocks pushed Japan's Nikkei .N225
0.3% higher and Australian shares rose 0.7%, though volumes were
pretty light. .T .AX
With a handful of trading days left in 2020, investors are
still on edge over whether Britain and the European Union can
agree on a post-Brexit trade deal and over what if any
consequences the new virus strain will have for vaccinations.
ITV's political editor said in a late-night tweet that
separate sources had raised the possibility of Britain and the
European Union striking a trade deal on Wednesday. Sterling GBP= climbed above $1.3400 in Asia and was last
at $1.3406 and 90.88 pence bought a euro EURGBP= . The dollar
index =USD was flat at 90.465.
Brent crude futures LCOc1 dropped 1.5% to $49.34 a barrel
and U.S. crude futures CLc1 fell 1.5% to $46.33. O/R
Gold XAU= nursed losses following the dollar's Tuesday
gains and was mostly steady at $1,864 an ounce. GOL/

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