Asia shares make guarded gains, virus breaks new records
By Wayne Cole SYDNEY (Reuters) - Global shares got off to a cautious start on Monday as surging coronavirus cases in Europe and the United states threaten the economic outlook, even as growth in China provides some support to Asia. The United States has seen its highest ever number of new COVID-19 cases in the past two days, while France also set unwanted case records and Spain announced a state of emergency.
By Wayne Cole
SYDNEY (Reuters) - Global shares got off to a cautious start on Monday as surging coronavirus cases in Europe and the United states threaten the economic outlook, even as growth in China provides some support to Asia.
The United States has seen its highest ever number of new COVID-19 cases in the past two days, while France also set unwanted case records and Spain announced a state of emergency.
That combined with no clear progress on a U.S. stimulus package to pull S&P 500 futures down 0.3%.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1%, but remained short of its recent 31-month peak. Japan's Nikkei rose 0.2%, and South Korea's main index was up 0.4%.
China's top leaders will chart the country's economic course for 2021-2025 at a meeting starting on Monday, seeking to balance growth and reforms amid an uncertain global outlook and deepening tensions with the United States.
A packed week for monetary policy sees three major central banks hold meetings. The Bank of Canada and Bank of Japan are expected to hold fire for now, while the market assumes the European Central Bank will sound cautious on inflation and growth even if they skip a further easing.
Data due out Thursday is forecast to show U.S. economic output rebounded by 31.9% in the third quarter, after the second's quarter's historic collapse, led by consumer spending.
Analysts at Westpac noted that such a bounce would still leave GDP around 4% lower than at the end of last year, with business investment still lagging badly.
"To fully recover the activity lost, additional meaningful fiscal stimulus is a must," they argued in a note.
The U.S. Presidential election will again loom large as markets move to price in the chance of a Democratic president and Congress, which would likely lead to more government spending and borrowing down the road.
That outlook drove U.S. 10-year Treasury yields to their highest since early June last week at 0.8720%. They were trading at 0.83% on Monday.
"We have raised the probability of a Democratic sweep, already our base case, from 40% to just over 50% and have increased our expectation of Biden to win from 65% to 75%," wrote analysts at NatWest Markets in a note.
"We see steeper U.S. yield curves and a weaker USD as likely to prevail in our base case."
The dollar was flatlining on Monday having fallen broadly last week. The euro was holding at $1.1850 and just under its recent top of $1.1880, while the dollar was pinned at 104.68 yen and not far form last week's trough of 104.32.
The dollar index was stuck at 92.790 after shedding almost 1% last week.
In commodity markets, gold edged down 0.1% to $1,898 an ounce.
Oil prices fell further in anticipation of a surge in Libyan crude supply and demand concerns caused by surging coronavirus cases in the United States and Europe. [O/R]
Brent crude futures lost 63 cents to $41.14 a barrel, while U.S. crude fell 61 cents to $39.24.
(Editing by Shri Navaratnam)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.