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GLOBAL MARKETS-Stocks set for dire week, best for dollar since April

Published 25/09/2020, 09:55
Updated 25/09/2020, 10:00
© Reuters.

© Reuters.

* Dollar having best week since start of April
* Italy's bond market borrowing costs near record low
* Yuan climbs after China govt bonds go into global WGBI
index
* End of quarter looming, Q4 to be action packed
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

(World shares set for worst week since June, since March for
EM)
By Marc Jones
LONDON, Sept 25 (Reuters) - After the slide it was the
see-saw for markets on Friday, as stocks in large parts of the
world, the euro and Dr Copper all headed for their worst weeks
since peak coronavirus panic, and the dollar cemented its best
run since April.
Asia had managed to end its worst week since the global
March meltdown with a modest gain and Europe's main bourses
started broadly steady, but with both France and Britain now
notching up almost record numbers of new virus cases the mood
was jittery. .EU
London's FTSE clawed up 0.2% but Frankfurt's Dax .GDAXI
and the CAC40 in Paris .FCHI were down 0.2% and 0.4% leaving
the pan-European STOXX 600 index .STOXX down more than 3%, and
travel stocks .SXTP down over 6% for the first time since
June. .EU
There had been a flicker of hope overnight after squabbling
U.S. political parties rekindled talk of another super-sized
stimulus package but the rise in the dollar =USD
and demand for safe U.S. and German government bonds remained.
GVD/EUR
In contrast, the drop in sentiment has hit emerging market
debt, especially countries with weak credit ratings, like a
wrecking ball. Argentina's newly restructured bonds have lost
around 25% making it the worst return to markets since Greece in
2012.
"It has been a very interesting week" said Saxo Bank's head
of FX strategy John Hardy. "We have seen the dollar come back
and what is interesting this time is that there also some
element of dollar liquidity stress in it again too."
He said the talk of more U.S. stimulus ahead of the November
Presidential election was likely to just be "show boating"
especially with a fierce battle over a seat on the Supreme Court
now thrown into the mix.
"I just can't see anyway that the Democrats can make a deal
here with this endgame into the election... it's dirty politics
all the way now".
On Wall Street overnight, the Dow Jones Industrial Average
.DJI rose 0.2%, the S&P 500 .SPX gained 0.30% and the Nasdaq
Composite .IXIC added 0.37%.
While the economic picture in the U.S. remains clouded, the
strongest sales of single-family homes in nearly 14 years in
August helped to revive some faith in the recovery. It helped nudge the benchmark 10-year U.S. Treasury yield
US10YT=RR up to 0.6725% from a close of 0.664% on Thursday.
German Bunds ticked up to -0.5% on the day too, but were set for
a weekly drop as the growing number of coronavirus cases in
Europe fed demand for safety.
In the currency markets, the dollar was hovering near
Thursday's two-month highs, at 105.40 JPY=EBS versus the yen
and pushing the euro EUR=EBS down to $1.1656 on course for its
worst week since the end of March/start of April.
China's yuan also made gains after the country's government
bond gained long-awaited entry into one of the world's most
influential bond benchmarks, the FTSE Russell WGBI. The dollar's strength this week has also battered
commodities, with gold set for its worst week in more than a
month. On Friday, spot gold XAU= was steady at $1,865.16 per
ounce. GOL/
Copper, which gets its "Dr Copper" nickname from its history
as a bellwether of global economic health, was set for its worst
week since the March panic with a near 4% drop, while Brent oil
LCOc1 was down 2% on the week but 0.8% better off on the day
at $42.2 per barrel.


<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
MSCI World over the years https://tmsnrt.rs/2EwZNCR
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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