SYDNEY (Reuters) – Asian stocks kicked off on Monday as rising cases of coronavirus in Europe and the United States undermined global prospects as Chinese leaders met to consider the future of the economic giant.
In the last two days, the United States has registered the largest number of new cases of COVID-1
This combined with a lack of clear progress on the US stimulus package to withdraw S&P 500 futures by 0.6%. EUROSTOXX 50 futures decreased 0.7% and FTSE futures 0.4%.
MSCI’s broadest Asia-Pacific equity index outside Japan rose 0.1%, despite not reaching its last 31-month peak. Japan’s Nikkei lost stability on both sides, while South Korea’s main index lost 0.3%.
China’s blue chips fell 0.5 percent as the country’s leaders met to chart the country’s economic course for 2021-2025, balancing growth with reforms amid an uncertain global outlook and deepening tensions with the United States.
The crowded monetary policy week brings together three major central banks. For now, the Bank of Canada and the Bank of Japan are expected to light a fire, while the market suggests that the European Central Bank will sound cautious about inflation and growth, even if they miss further easing.
Data released on Thursday is expected to show that US economic output recovered 31.9% in the third quarter, following a historic second-quarter collapse driven by consumer spending.
Analysts at Westpac note that such a jump will still leave GDP about 4% lower than at the end of last year, with business investment still lagging behind.
“In order to fully recover the lost activity, an additional meaningful fiscal stimulus is needed,” they said in a note.
The US presidential election will be big again as markets shift to the price in a chance for a democratic president and Congress, which is likely to lead to more government spending and loans along the way.
This outlook led the US Treasury Department’s 10-year yield to its highest level since the beginning of June last week to 0.8720%. On Monday, they traded at 0.83%.
“We have increased the likelihood of a democratic scale, which is already a major case, from 40% to just over 50% and increased our expectations of Biden winning from 65% to 75%,” analysts at NatWest Markets wrote in a note.
“We are seeing steeper US yield curves and weaker US dollars that are likely to prevail in our base case.”
The dollar was flatting on Monday after falling sharply last week. The euro remained at $ 1.1836 and slightly below its recent high of $ 1.1880, while the dollar was fixed at 104.86 yen and not far from last week’s trough of 104.32.
The dollar index was stronger than 92,904 after falling nearly 1% last week.
In commodity markets, gold fell 0.1 percent to $ 1,898 an ounce.
Oil prices have fallen further in anticipation of rising Libyan problems with the supply and demand of raw materials caused by the growing incidence of coronavirus in the United States and Europe.
Brent crude futures lost 73 cents to $ 41.04 a barrel, while US oil also fell 73 cents to $ 39.12.
Edited by Richard Pullin and Sri Navaratnam