GLOBAL MARKETS-World shares subdued amid weak data; oil resumes gains

* Grim PMI data in Europe
* Oil resumes multi-day winning streak
* Chinese shares reverse losses on CNY fixing
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr

By Tom Arnold
LONDON, May 6 (Reuters) - Global shares struggled on
Wednesday as weak economic data, doubts about the easing of
coronavirus lockdowns and simmering U.S.-China tensions cast a
pall over markets.
Oil prices extended their run of gains, supported by
expectations that demand will recover and by a record supply cut
from OPEC and other producers. O/R
MSCI's index of global shares .MIWD00000PUS was trading
0.1% up. The pan-European STOXX 600 .STOXX was 0.3% higher,
helped by gains in healthcare stocks .SXDP on the back of
better-than-expected quarterly results from Denmark's Novo
Nordisk NOVOb.CO and German dialysis specialist Fresenius
Medical Care FMEG.DE . Shares in UniCredit < CRDI.MI> recovered from earlier falls
to trade 0.9% higher. Italy's biggest bank reported a 2.7
billion-euro loss in the first quarter amid loan writedowns in
anticipation of the damage caused by the pandemic. "Earnings season is not great, but it's really the issue of
the virus and the end of the lockdown, and sentiment towards
that will push the market," said Francois Savary, chief
investment officer at Swiss wealth manager Prime Partners.
"We think there'll be a consolidation for the equity market.
It won't take us back to the lows we saw in March, but markets
are waiting for a clearer outlook on how the lockdown will end."
Germany and Spain are among economies gradually emerging
from lockdowns, but the outlook for an easing of restrictions
elsewhere is less certain.
In a reminder of the economic damage from the lockdown, euro
zone business activity almost ground to a halt last month, IHS
Markit's final Composite Purchasing Managers' Index showed.
The European Commission forecast the euro zone economy will
contract by a record 7.7% this year, while the inflation rate
will slow to 0.2%, but public debt and budget deficits will
balloon. Wall Street futures were positive, with E-minis for the
S&P500 ESc1 up 0.8%.
MSCI's broadest index of Asia Pacific shares outside of
Japan .MIAPJ0000PUS climbed 0.6%. Volumes were light with
Japanese markets closed for a holiday.
China, opening for the first time since Thursday, reversed
early losses, sending its blue-chip index .CSI300 up 0.6%.
In a move seen by analysts as offering a olive branch to
Washington amid the trade tensions, China's central bank set the
yuan CNY= at a broadly neutral midpoint. The exchange rate has
been a contentious point in China-U.S. ties.
"The People's Bank of China went a long way to extinguishing
one major trade war hotspot by setting the yuan reference rate
on a more risk-friendly level," said Stephen Innes, chief
markets strategist at AxiCorp.
"USD/CNH dropped about 200 pips on the stable fix, and a
recovery in risk sentiment ensued, and there was no
follow-through on U.S. President Trump's threat to China."
President Donald Trump has repeatedly taken aim at China as
the source of the pandemic and warned that it would be held to
account. On Tuesday, he urged China to be transparent about the
origins of the coronavirus, which began in the Chinese city of
Wuhan late last year. On Wall Street overnight, the S&P 500 pared earlier gains
after U.S. Federal Reserve Vice Chair Richard Clarida warned
that economic data would get worse before it got better.
FALL
In currencies, the euro resumed its fall, declining to a
near two-week low of $1.0786 on Wednesday EUR=EBS . The
currency was still under pressure after Germany's top court on
Tuesday ruled that the European Central Bank's
quantitative-easing programme "partially violated" the German
constitution. The yen rose 0.2% to 106.35, having earlier reached 106.20,
its strongest since March 17 JPY=EBS .
The ADP National Employment Report of private U.S. payrolls
on Wednesday could give an early warning of the damage expected
to be revealed on Friday in the U.S. government's measure of
jobs in April. It is expected to show nearly 22 million jobs
were lost last month.
German borrowing costs rose before the country's first
syndicated bond sale in half a decade. Germany's benchmark
10-year yields rose two basis points to -0.55%, though they
remain close to Tuesday's seven-week lows DE10YT=RR .
In commodities, U.S. crude futures CLc1 rose 88 cents to
$25.44 a barrel. Brent crude LCOc1 was up 79 cents to $31.76,
having risen in the past six sessions. The market is
anticipating that demand will recover and that a record supply
cut led by the Organization of the Petroleum Exporting Countries
will support prices.
Analysts said the rebalancing of the market would be choppy.
"We're talking about normalisation of supply and demand but
we've got a long way to go," said Lachlan Shaw, National
Australia Bank's head of commodity strategy.
"There are a lot of supply cuts that have come through. That
combined with some early signs of demand lifting has meant the
rate of inventory build is slowing."
Spot gold XAU= eased 0.1% to $1,704 an ounce.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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