Categories
World News

European stocks pause as virus worries offset rebound hopes

(Reuters) – European stocks paused on Friday after gains through the week as another record surge in U.S. coronavirus cases dulled optimism from a brisk recovery in China’s services sector.

The pan-European STOXX 600 index was largely flat after opening marginally higher, with trading volumes thinned by a U.S. market holiday.

Technology stocks .SX8P led the gains, rising 0.7%, while banks .SX7P, insurers .SXIP and oil & gas .SXEP fell after a strong rally in the previous session.

The benchmark index was headed for a 2.8% weekly gain as hopes of a COVID-19 vaccine and a series of strong data pointed to a global economic recovery from the health crisis.

But investors are skeptical of further gains in equities as the United States set a new daily global record for COVID-19 cases on Thursday, driving several U.S. states to delay their reopening plans.

“The fear of another big(ger) drop in equity prices continues to haunt financial markets. The opportunity to engage in European assets also seems a bit limited,” Thomas Flury, head of FX Strategies at UBS Global Wealth Management wrote to clients.

“For this, clearer signs of a recovery in international trade should be visible. The data on this is constructive, but not surprising to the upside.”

A private survey showed that China’s services sector expanded at the fastest pace in over a decade in June as the easing of lockdown measures revived consumer demand, though companies continued to shed jobs.

Paris’s blue-chip CAC 40 .FCHI slipped 0.3% as French Prime Minister Edouard Philippe resigned ahead of a government reshuffle by President Emmanuel Macron designed to win back disillusioned voters ahead of a possible re-election bid.

Among individual movers, Germany’s Delivery Hero (DHER.DE) jumped 5.5% after the takeaway food company said its order growth nearly doubled in the second quarter.

France’s utility firm EDF (EDF.PA) rose 4.8% after it revised upwards its 2020 nuclear output target.

UK retailer Next (NXT.L) fell 2.5% after Goldman Sachs downgraded the stock to “sell”, while Primark-owner AB Foods (ABF.L) slipped 1.3% after the U.S. bank downgraded its stock to “neutral”.

Source: Read Full Article

Categories
Business

Cyclical rally, U.S. jobs data drive European stocks to one-week high

(Reuters) – European shares closed at a one-week high on Thursday as hopes of a COVID-19 vaccine and a better-than-expected rebound in U.S. hiring overshadowed concerns about surging coronavirus infections.

The pan-European STOXX 600 rose 2%, easing slightly from highs hit after data showed the U.S. economy created a record 4.8 million jobs in June as more restaurants and bars resumed operations.

Banks .SX7P were the top gainers in Europe, jumping 4.3% to mark their best day since June 5, while other cyclical sectors such automakers .SXAP, chemicals .SX4P and insurance companies .SXIP gained between 2.5% and 3.4%.

Equity markets started the second half of the year on a positive note earlier this week, as a COVID-19 vaccine developed by German biotech firm BioNTech (BNTX.O) and U.S. giant Pfizer (PFE.N) was found to be well-tolerated in early stage human trials, while business surveys showed a slump in global manufacturing eased in June.

“The market response is likely to be positive, but inevitably tinged with growing concerns that the recovery is already losing steam,” said Seema Shah, chief strategist at Principal Global Investors.

“With the closings having been reversed or paused across 40% of the U.S., July’s job report may paint a much weaker story.”

Raising risks of fresh lockdowns, new U.S. cases of COVID-19 jumped nearly 50,000 on Wednesday, according to a Reuters tally, marking the biggest one-day rise since the start of the pandemic.

Further adding to concerns, Britain and the European Union failed to make progress in talks on post-Brexit relations this week due to major differences, officials said.

Among individual movers, Associated British Foods (ABF.L) gained 4.1% after saying trading in its Primark fashion stores that reopened after the lockdown has been “reassuring and encouraging”.

Scandal-hit Wirecard (WDIG.DE) slumped 35.4% after police and public prosecutors raided its headquarters in Munich and four properties in Germany and Austria.

Dutch construction company BAM Groep (BAMN.AS) dropped 11.6% as it warned of a “significant” loss in the first half of the year.

Source: Read Full Article

Categories
World News

Taking EU helm, Germany's Merkel calls on Europe to show resolve

BERLIN/BRUSSELS (Reuters) – German Chancellor Angela Merkel has urged European Union leaders to reach agreement on a multi-billion euro coronavirus recovery fund, calling for resolve and saying Europe was facing the most difficult situation in its history.

Echoing Merkel’s urgency as Germany took the helm of the bloc, the EU’s chief executive Ursula von der Leyen joined the chancellor via video link to warn that the next six months were crucial after the region reacted slowly to the coronavirus and now faced a severe economic downturn.

“We are clear where the difficulties are but we all know it would be good if we agree in July. If we need more time it would be a less good variant,” Merkel said, also referring to plans for the new seven-year EU budget.

“There must be a deal in the summer, I cannot imagine any other variant so we will work very hard to show a sign of our resolve. We know that Europe is in the most difficult situation in its history,” she told a news conference.

With almost 35,000 deaths from COVID-19 recorded in Italy alone, lockdowns across most of the European Union have shuttered businesses, upended livelihoods and indebted governments as they seek to shield workers.

A Commission proposal for a 750 billion euro ($843.08 billion) rescue fund has been largely welcomed by EU leaders but must still be agreed, and fiscally conservative northern countries led by the Netherlands are loath to see their taxpayers pay for grants to southern European states.

“In such times, solidarity is a test,” Merkel said, in a veiled reference to frustration across Italy and Spain, the EU countries most affected by the novel coronavirus and which have questioned the value of the union in the crisis.

Although the rotating, six-month presidency gives only limited power, as Europe’s most respected leader Merkel faces huge expectations that she can negotiate a breakthrough on the recovery fund and a new 2021-2027 budget for the bloc.

Source: Read Full Article

Categories
Business

Cyclical rally, U.S. jobs data drive European stocks to one-week high

(Reuters) – European shares closed at a one-week high on Thursday as hopes of a COVID-19 vaccine and a better-than-expected rebound in U.S. hiring overshadowed concerns about surging coronavirus infections.

The pan-European STOXX 600 rose 2%, easing slightly from highs hit after data showed the U.S. economy created a record 4.8 million jobs in June as more restaurants and bars resumed operations.

Banks .SX7P were the top gainers in Europe, jumping 4.3% to mark their best day since June 5, while other cyclical sectors such automakers .SXAP, chemicals .SX4P and insurance companies .SXIP gained between 2.5% and 3.4%.

Equity markets started the second half of the year on a positive note earlier this week, as a COVID-19 vaccine developed by German biotech firm BioNTech (BNTX.O) and U.S. giant Pfizer (PFE.N) was found to be well-tolerated in early stage human trials, while business surveys showed a slump in global manufacturing eased in June.

“The market response is likely to be positive, but inevitably tinged with growing concerns that the recovery is already losing steam,” said Seema Shah, chief strategist at Principal Global Investors.

“With the closings having been reversed or paused across 40% of the U.S., July’s job report may paint a much weaker story.”

Raising risks of fresh lockdowns, new U.S. cases of COVID-19 jumped nearly 50,000 on Wednesday, according to a Reuters tally, marking the biggest one-day rise since the start of the pandemic.

Further adding to concerns, Britain and the European Union failed to make progress in talks on post-Brexit relations this week due to major differences, officials said.

Among individual movers, Associated British Foods (ABF.L) gained 4.1% after saying trading in its Primark fashion stores that reopened after the lockdown has been “reassuring and encouraging”.

Scandal-hit Wirecard (WDIG.DE) slumped 35.4% after police and public prosecutors raided its headquarters in Munich and four properties in Germany and Austria.

Dutch construction company BAM Groep (BAMN.AS) dropped 11.6% as it warned of a “significant” loss in the first half of the year.

Source: Read Full Article

Categories
World News

Germany planning 42.5 bln eur in tax relief to 2024 – Handelsblatt

BERLIN, July 2 (Reuters) – Germany is planning tax cuts totalling 42.5 billion euros over the period to 2024, with 7 billion euros of cuts planned in 2021 alone, Handelsblatt newspaper reported on Thursday, adding that the cabinet would agree the measures at the end of July.

According to the newspaper, these latest measures to stimulate the recovery of Europe’s largest economy will include an increase in individuals’ tax-free income allowance as well as increases to the income thresholds at which higher income tax rates kick in.

Families will also receive extra money for each child they have, the paper reported. (Reporting by Thomas Escritt; editing by Thomas Seythal)

Source: Read Full Article

Categories
Business

Factory data, vaccine bets power stocks higher; U.S. dollar dips

NEW YORK (Reuters) – Stocks across the globe rose on Wednesday following a string of data pointing to a recovery in manufacturing and on bets for a COVID-19 vaccine, while the risk-on mood pushed the U.S. dollar lower.

Germany’s manufacturing sector contracted at a slower pace in June, while activity in the United States hit a 14-month high. French factory activity rebounded into growth, and activity in China’s factories offered further signs that the world’s second-largest economy may have passed the worst of the devastation caused by the pandemic.

On Thursday, the market’s focus will be on the U.S. non-farm payrolls report.

“The manufacturing number adds a boost to investor confidence,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. “Now the market is positioning itself in anticipation for tomorrow’s numbers.”

Pfizer shares jumped 4% after a COVID-19 vaccine developed jointly with Germany’s BioNTech was found to be well tolerated, the fourth early-stage drug to show promise in human testing.

The news comes as a Reuters analysis showed coronavirus cases more than doubled in 14 U.S. states last month and fears are growing that the case-load could prompt fresh lockdowns.

The Dow Jones Industrial Average fell 24.95 points, or 0.1%, to 25,787.93, the S&P 500 gained 15.05 points, or 0.49%, to 3,115.34 and the Nasdaq Composite added 81.72 points, or 0.81%, to 10,140.48.

The pan-European STOXX 600 index rose 0.24% and MSCI’s gauge of stocks across the globe gained 0.42%.

Emerging market stocks rose 0.61%, while Japan’s Nikkei futures lost 0.56%.

Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.44% higher.

For a graphic on World financial markets in 2020:

here

The stronger data and vaccine news weighed on the dollar, which has been bid on days when traders are less risky.

“There’s definitely a risk-on tone to the market, which continues to bet on the fact that we’re past the worst point of COVID. But I think the jury is still out on that judgment,” said Boris Schlossberg, managing director at BK Asset Management in New York.

“There’s a significant risk of reclosing some of the states. There’s still a lot of risk-off flows, and the dollar could be the beneficiary of those flows,” he added.

The dollar index fell 0.216%, with the euro up 0.13% to $1.1246. The Japanese yen strengthened 0.41% versus the greenback at 107.50 per dollar, while Sterling was last trading at $1.2471, up 0.58% on the day.

The global rise in manufacturing activity put a bid under energy prices, also supported by a bigger-than-expected drop in U.S. crude inventories.

“Largely we are moving forward in the way of demand and not backward, despite the negative view of coronavirus cases rising,” said Tony Headrick, energy markets analyst at CHS Hedging.

U.S. crude recently rose 1.25% to $39.76 per barrel and Brent was at $41.99, up 1.74% on the day.

Treasury yields also rose with the risk-on sentiment.

Benchmark 10-year notes last fell 11/32 in price to yield 0.6873%, from 0.653% late on Tuesday.

The 30-year bond last fell 22/32 in price to yield 1.4391%, from 1.411%.

Gold prices rose to their highest in 8 years at $1,788.96 an ounce, and recently dropped 0.8% to $1,767.09 an ounce. [GOL/]

Source: Read Full Article

Categories
Business

Global shares begin second half with a whimper despite positive data

LONDON (Reuters) – Global stocks struggled for momentum on Wednesday as improving economic data was offset by concern that surging coronavirus cases in the United States could derail the world’s recovery before it properly begins.

Germany’s manufacturing sector contracted at a slower pace in June, while French factory activity rebounded into growth, data showed.

German retail sales rose sharply in May, reflecting a rebound in private consumption, while a recovery in China’s factory activity offered further signs that the world’s second largest economy may have passed the worst of the devastation caused by the pandemic.

Germany’s jobless rate rose by 69,000 in June, far less than expected. Economic institute Ifo said Europe’s largest economy will gradually recover after the slump caused by the pandemic and will likely return to last year’s level at the end of 2021.

Coronavirus cases surged, with the United States recording 47,000 infections on Tuesday, its biggest single-day spike since the pandemic began.

MSCI’s world shares index was 0.1% higher after rising 18% for its biggest three-month gain since 2009 in the second quarter, but it still closed the first half around 8% lower from where it started the year.

After their best quarter since March 2015, European stocks opened firmer, with the broader Euro STOXX 600 gaining 0.3%.

“We are at the beginning of the quarter but it doesn’t look very different from where we left the last one,” said François Savary, chief investment officer at Swiss wealth manager Prime Partners, predicting “a further consolidation over the summer.”

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, led by gains in China. E-Mini futures for the S&P 500 were down 0.2%.

It followed a strong finish to the quarter on Wall Street but also a loss of momentum in recent weeks as U.S. infection rates have surged, with some states reimposing restrictions on business and personal activity.

The S&P 500 index rose 1.5% for an almost 20% gain over the past three months, fuelled by unprecedented central bank stimulus and hopes for a swift pandemic recovery, but it rose only 1.8% in June.

Coronavirus cases more than doubled in 14 U.S. states last month, a Reuters analysis showed, and fears are growing that the caseload could prompt fresh lockdowns.

“The rise in COVID-19 infections is now triggering a reversal on the reopening strategy,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney. “It remains to be seen if the U.S economy will continue to surprise over the coming month.”

The U.S. government bond market remains in a cautious mood. Yields on benchmark 10-year government debt rose overnight to 0.6774%, but finished the quarter steady.

In Europe, Germany’s 10-year yield rose to a one-week high, rising 2 basis points on the day to -0.44, helped by better than expected German retail sales. [L8N2E815P]

UNWELCOME DEVELOPMENTS

China’s introduction of sweeping new laws to crack down on dissent in Hong Kong also has investors eying geopolitical tensions with trepidation.

The laws have prompted fresh protests in the city and Washington has begun dismantling Hong Kong’s special status under U.S. law.

“It’s one of a number of geopolitical factors which is a negative for some asset classes now,” said Imre Speizer, a foreign exchange strategist at Westpac in Auckland.

Currency markets were in a holding pattern before the next slew of data due to provide a snapshot of the U.S. recovery.

The dollar rose overnight but edged back down in early London trading, before U.S. manufacturing PMI and unemployment data. The euro was broadly flat on the day, at $1.12275.

U.S. manufacturing activity data on Wednesday is forecast to show a recovery from an 11-year low in April while the non-farm payrolls report on Thursday is expected to show the economy added 3 million jobs in June.

Gold hovered near an 8-year high at $1787.86 an ounce. [GOL/]

Brent crude rose 2.5% to $42.32 a barrel, while U.S. crude was up 2.7% at $40.31 a barrel after an industry report showed crude stockpiles in the U.S. staged a bigger drop than expected. [O/R]

Graphic: World FX rates in 2020 here

Source: Read Full Article

Categories
Business

Asian shares inch higher as data drives rebound hopes

(Reuters) – Asian stocks struggled for headway on Wednesday as the second half of the year got underway, with improving economic data offset by worries that surging coronavirus cases in the United States could derail the world’s recovery before it properly begins.

Following firm U.S. housing data and signs of a rebound in Europe’s economy, the latest boost to sentiment came from Chinese factory activity gathering steam in June, with the Caixin/Markit manufacturing PMI rising to 51.2 compared with expectations for 50.5.

But virus cases surged, too, with the U.S. recording 47,000 infections on Tuesday, its biggest single-day spike since the pandemic began.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%, led by gains in Korea and China.

Japan’s Nikkei slipped 0.2%, though, U.S. stock futures fell 0.3% and gold sat close to an eight-year peak, pointing to elevated caution.

The moves follow a strong finish to the quarter on Wall Street and also a loss of momentum in recent weeks as U.S. infection rates have surged, with some states reimposing restrictions on business and personal activity.

The S&P 500 index rose 1.5% for an almost 20% gain over the past three months, fuelled by unprecedented central bank stimulus and hopes for a swift pandemic recovery, but it rose only 1.8% in June.

Coronavirus cases more than doubled in 14 U.S. states last month, a Reuters analysis showed, and fears are growing that the caseload could prompt fresh lockdowns.

“Clearly we are not in total control right now,” the country’s top infectious disease expert, Anthony Fauci, told a Senate committee on Tuesday, adding that cases could increase by as much as 100,000 daily if the outbreak is not contained.

The surge has prompted California, Texas and Florida to shut recently re-opened bars in the last few days, while Australia has locked-down parts of its second-biggest city, Melbourne, to try and stop a spike in cases there.

“The rise in COVID-19 infections is now triggering a reversal on the reopening strategy,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.

“It remains to be seen if the U.S economy will continue to surprise over the coming month.”

The U.S. government bond market remains in a cautious mood. Yields on benchmark 10-year government debt rose overnight to 0.6774%, but finished the quarter steady. [US/]

UNWELCOME DEVELOPMENTS

On top of virus worries, China’s introduction of sweeping new laws to crack down on dissent in Hong Kong also has investors eying geopolitical tensions with trepidation.

The laws have already prompted Washington to begin dismantling Hong Kong’s special status under U.S. law.

“It has not taken people by surprise, but it’s an unwelcome development,” said Imre Speizer, a foreign exchange strategist at Westpac in Auckland. “It’s one of a number of geopolitical factors which is a negative for some asset classes now.”

Currency markets were in a holding pattern ahead of the next slew of data due to provide a snapshot of the U.S. recovery.

The dollar held gains against most majors and slipped on the safe-haven yen, last buying 107.68 yen and trading at $0.6909 per Australian dollar. [FRX/]

U.S. manufacturing activity data due later in the day,is forecast to show a recovery from a 11-year low in April while the non-farm payrolls report on Thursday is expected to show the economy added 3 million jobs in June.

Elsewhere sterling rebounded from near a one-month low on Tuesday and hung on to most of that ground at $1.2382.

Gold hovered near an 8-year high at $1780.64 an ounce. Brent crude rose 43 cents or 1% to $41.70 a barrel, while U.S. crude was up 1.3% at $39.76 a barrel.

Source: Read Full Article

Categories
World News

European exchanges oppose shorter stock trading day sought by London firms

LONDON (Reuters) – Shorter hours would not be in the best interests of investors or stock markets, European bourses said on Wednesday, dashing hopes at banks and investment firms in London of cutting 90 minutes from the trading day.

The Federation of European Securities Exchanges (FESE) said shorter hours would be a move in the wrong direction. The current European trading day is 0900-1730 continental European time, longer than in Asia or Wall Street.

This means that share trading spans the Asian market close and the open on Wall Street, and a shorter day could put Europe at a competitive disadvantage to rival trading venues in other parts of the world, FESE said.

The London Stock Exchange (LSE.L), which is not a member of FESE, held a public consultation earlier this year that found broad backing for cutting the trading day by 90 minutes to improve mental wellbeing and help attract more women onto trading floors.

But without a harmonised approach across Europe, the goals of shorter hours would be harder to achieve given banks have pan-European trading desks, the LSE has said.

London will also be leery of putting itself at any competitive disadvantage to rival bourses on the continent now that Britain has left the European Union.

FESE said the length of the trading day does not have a negative impact on the working culture of trading and that other measures like more shifts were necessary to achieve that.

Britain’s Investment Association and the Association for Financial Markets in Europe, a banking lobby, reiterated their calls on Tuesday for a cut in trading hours.

Pan-European Exchange Euronext has just completed its own public consultation on market hours. Euronext, which is a vice-president of FESE, has already expressed scepticism about what it has called a “London proposal”.

Source: Read Full Article

Categories
World News

Germany arrests far-right suspect over threat to attack Muslims

Police find weapons in house of 21-year-old man who was inspired by last year’s Christchurch massacre in New Zealand.

Police in Germany has arrested a man on suspicion of planning to kill Muslims in an attack inspired by the 2019 massacre in two Christchurch, New Zealand, mosques, according to prosecutors.

The 21-year-old from the northern city of Hildesheim had announced his attack plans “in an anonymous internet chat”, the state prosecutor’s office in the town of Celle said on Monday.

More:

  • Hanau mourns its loved ones murdered in far-right attack

  • Timeline: Far-right attacks in Germany

  • Germany shisha lounge shootings: All the latest updates

Initial investigations show the suspect “has for some time been considering the idea of committing an attack in which he wanted to kill numerous people in order to attract worldwide media attention”, prosecutors said.

The suspect referenced the Christchurch attacker, who killed 51 people in two mosques in March 2019, and said he wanted to carry out a similar attack.

“His aim was to kill Muslims,” prosecutors said.

Weapons found

Police found weapons in the suspect’s home, as well as electronic files containing far-right content.

He was arrested on Saturday and faces charges of threatening to commit criminal offences and financing violence through the purchase of weapons.

Germany has been rocked by a string of far-right attacks over the past 12 months.

A gunman with apparent far-right beliefs killed nine people at a shisha bar and a cafe in the city of Hanau, near Frankfurt, in February, while two people were killed in an attack on a synagogue in Halle, near Leipzig, in October.

In June 2019, pro-immigration politician Walter Lubcke was found shot dead at his home in the central state of Hesse, and a far-right sympathiser has been charged with his murder.

Interior Minister Horst Seehofer proclaimed in March that far-right violence was “the biggest danger for democracy in Germany”, promising a beefed-up security response.


Inside Story

Is the far-right shaping the EU’s migration policy?

Source: Read Full Article