* European stocks tip-toe higher ahead of recovery fund
summit
* Hopes of more U.S. fiscal spending suppress China tensions
* Gold clinging on for sixth weekly gain in a row
* World stocks set for modest weekly gain
* FAANGs pranged by Netflix flop
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, July 17 (Reuters) - Europe's stock markets and fast
charging currencies were left treading water on Friday, as EU
leaders met in Brussels to try to hammer through a 750 billion
euro post-pandemic recovery fund.
European and world equity markets .MIWD00000PUS were
heading for their third weekly gain in a row, but they were the
smallest yet and Friday's go-slow involved all the main asset
classes from commodities to bonds. O/R .EU
London's FTSE .FTSE , Paris .FCHI , Milan .FCHI and
Madrid IBEX had all sagged into the red in early trading and
though the euro ticked up, Italian and Spanish bond yields were
struggling to stay anchored to their recent lows. GVD/EUR
"Presumably, as is the way of Europe, they will agree to
come back from more talks followed by a compromise and a watered
down deal," Societe Generale's Kit Juckes said of the EU
discussions. "The positive though is that we are getting a
recovery fund."
An eventual green light to the 750 billion euro plan should
finally lead to joint European debt, but investors are seeing
their broader list of uncertainties and questions growing again.
Will the COVID-19 pandemic force economies into lockdown
again? Will governments and central banks keep feeding the
markets beast with stimulus? And finally, are tech shares losing
their mojo?
Netflix shares had dived 9% after the bell in Wall Street on
Thursday after its results had flopped. In Asia, Japan's Nikkei .N225 slid 0.3% on concerns about
rising virus infections in Tokyo. China's CSI300 index .CSI
climbed 0.25%, though that was after a near 5% slump on
Thursday.
Adding to the recent rise in U.S.-Sino tensions, Washington
had said it was considering banning members of the Chinese
Communist Party travelling to the United States. The party
totals more than 90 million people. Market watchers said investors were counting on more
stimulus. As well as Europe's recovery fund, the U.S. Congress
is set to begin debating a new aid package next week, as several
states in the country's south and west implement fresh lockdown
measures to curb the virus.
While retail sales for June released on Thursday beat market
expectations, real-time measures of retail foot traffic and
employee working hours and shifts have flatlined after steady
growth since April. "We now see higher risk of a market correction, considering
the improvement in hard economic data we have seen over the past
couple of months is likely to halt," said Tomo Kinoshita, global
market strategist at Invesco in Tokyo.
STUCK IN A RUTTE
In currencies, the euro hovered below the four-week high it
touched earlier this week, but was barely budging as European
Union leaders met. Dutch Prime Minister Mark Rutte, one of the main resisters
to the recovery fund including mass grants, said that he was
"not optimistic" that agreement would be reached on Friday as he
arrived for the meeting.
The Netherlands wants countries receiving EU support from
the fund to agree to reforms in their labour markets and pension
systems, and is leading a group of several smaller EU nations
calling for stricter conditions.
The euro fetched $1.14 EUR= , up 0.2% on the day and
heading for its fourth straight week of gains against a dollar
that has been struggling globally.
The yen was up fractionally at 107.13 per dollar JPY= and
Sweden's high-flying crown was up again. /FRX
In commodities trading, oil prices were little changed with
Brent LCOc1 down 0.25% at $43.26 per barrel and U.S. crude
CLv1 down 0.15% at $40.87.
The United States reported at least 75,000 new COVID-19
cases on Thursday, a daily record. Spain and Australia reported
their steepest daily jumps in more than two months, while cases
continued to soar in India and Brazil.
The two benchmark crudes had fallen 1% on Thursday too after
the Organization of the Petroleum Exporting Countries and its
allies, a group known as OPEC+, agreed to trim their record
supply cuts of 9.7 million barrels per day (bpd) by 2 million
bpd, starting in August.
($1 = 0.8783 euros)
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