* Coronavirus cases rise, Asian, European stocks slip
* World stocks still set for best week since June
* Major currencies steady, oil turns weak again
* U.S. Payrolls might be tricky to decipher this month
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, Feb 7 (Reuters) - Nagging coronavirus worries took a
swipe at world markets on Friday but failed to stand in the way
of the best week for stocks since June and the strongest for the
dollar since August.
European trading pushed stocks down and safe-haven
government bonds up, a pattern set in Asia that traders seemed
happy to extend before monthly U.S. jobs data.
Investors wavered over the impact of the coronavirus. The
rate of new infections has slowed, although the extent of the
economic disruption due to curbs on travel and trade are not
completely clear. But the week till now has been one long rebound that lifted
MSCI's main world stocks index 3% .MIWD00000PUS , heading back
to the record highs reached at the start of the year.
Thanks to a $400 billion wipeout on Monday, Shanghai is
poised for its worst week in eight months. But other Asian
indexes are ahead and the pan-European FTSEurofirst .FTEU3 is
heading for its best week since late 2016.
"We are not that nervous, actually we are increasing our
risk allocation," said SEB investment management's global head
of asset allocation, Hans Peterson, adding that the risk of a
massive worldwide epidemic seemed to have dropped.
"We look more at this moment at the macro data in the U.S.
which is really very good ... and we presume we will get
substantial support from central banks like we did in China on
Monday."
Traders also had other areas to focus on. The euro fell to
its lowest since October in early European trading after German
industrial output recorded its biggest decline in a decade and
strong U.S. employment numbers had primed the dollar ahead U.S.
payrolls data.
In Asian trade, the yen halted a slide that has it set for
its worst week in 18 months, leaving the currency sitting just
above a two-week low at 109.89 per dollar. FRX/
TRAMPLED
The Australian dollar, often seen as a proxy for China,
weakened 0.5% to $0.6699 AUD=D3 after the Reserve Bank of
Australia slashed growth forecasts in its quarterly economic
outlook, blaming its bushfires and the coronavirus.
The Aussie was on track for its first weekly gain this year,
whereas the Singapore dollar SGD= and Thai baht THB= have
been trampled in a rush out of from emerging market. EMRG/FRX
Much is unknown about the coronavirus. The World Health
Organization has said it is too early to call a peak in the
outbreak. The death toll has doubled in less than a week to 638,
636 in China and two elsewhere. China's aggressive response, dubbed a "people's war for
epidemic prevention" by President Xi Jinping, has seen Beijing
pump billions of dollars into the money market to try and
stabilise confidence.
Yet, owing to much greater exposure to Chinese demand and
less access to the benefits of monetary stimulus, commodity
prices have been more sensitive to conditions on the ground.
Oil and metal prices fell hard when the coronavirus outbreak
gained pace and have been slow to recover.
Brent crude LCOc1 was weak again on Friday at $54.43 per
barrel, heading for its fifth back-to-back weekly drop. Oil
prices have fallen by 16% this year.
A rally in copper, often seen as a barometer of global
economic health because of its wide industrial use, had at
$5,695 per tonne, although it has seen its strongest week since
the start of December. MET/L
"We think that demand could come back strongly as opposed to
gradually in Q2 2020," said Commonwealth Bank commodities
analyst Vivek Dhar. "But the risk in the near term is that
(Chinese) provinces take longer to return to work in order to
contain the spread of the virus."
Stocks stabilize as pace of reported virus infections slows https://tmsnrt.rs/2tyLx6W
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