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GLOBAL MARKETS-Shares, euro climb on robust risk appetite as lockdowns ease

Wed, 3rd Jun 2020 20:12

(Adds oil, gold settlement prices)

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

* Boeing's 13% gain helps lift Wall Street

* European shares rise on upbeat China data

* Dollar dips to 11-week low on improved risk appetite

* Copper at March highs on Chinese recovery hopes

* Reuters Live Markets blog on European and UK stock
markets:

By Herbert Lash

NEW YORK, June 3 (Reuters) - A gauge of global equity
markets rose and the euro gained against the dollar on
Wednesday, both for a seventh session, indicating strong risk
appetite as easing lockdowns and hopes for more monetary
stimulus boosted investor confidence.

Investors shed safe-haven assets such as gold and government
debt on encouraging economic data from China and hopes the worst
of the downturn stemming from the coronavirus crisis is over.

Gold prices extended losses as MSCI's all-country world
index, a gauge of equity markets in 49 countries, rose to its
highest since March 6, while Germany's benchmark 10-year Bund
yield hit its highest since mid-April.

U.S. gold futures fell $27.40 to settle at $1,697.80
an ounce, the first time bullion has traded below $1,700 in a
week.

The euro rose 0.56% to $1.1232 and has gained more
than 3% since May 25.

Copper hit its highest since March, buoyed by the prospect
of higher demand from top consumer China after its services
sector returned to growth in April for the first time since
January, a private survey showed.

The dollar fell to an 11-week low against a basket of
currencies but strong equity gains set the tone of investor
optimism, as leading bourses in Paris and Frankfurt rose more
than 3% and the Dow rose almost 2% as Boeing shares surged.

Stocks are an important risk indicator that continue to
surprise on the upside and push investors who have been on the
sidelines into the market, Marvin Loh, senior global macro
strategist at State Street Global Markets in Boston.

"The fact that you got this broad-risk indicator that's
stable, and in a lot of ways is defying a lot of the well-known
critics out there in terms of continuing to march higher, is
pulling other people into the market," Loh said.

MSCI's gauge of stocks across the globe
gained 1.65% while the pan-European STOXX 600 index
rose 2.54%.

The Dow Jones Industrial Average rose 499.62 points,
or 1.94%, to 26,242.27. The S&P 500 gained 40.97 points,
or 1.33%, to 3,121.79 and the Nasdaq Composite added
77.47 points, or 0.81%, to 9,685.84.

An almost 13% jump in Boeing shares lifted Wall
Street after billionaire investor Daniel Loeb's Third Point said
it took a stake in the planemaker.

Data showed signs of stabilization in the U.S. labor market
after the ADP National Employment Report said private employers
laid off another 2.76 million workers, or less than an expected
9 million job losses.

Also supporting investor confidence was the Institute for
Supply Management's (ISM) reading, which showed U.S. services
industry activity pushed off an 11-year low in May.

Euro zone businesses suffered another contraction in
activity in May. While there are signs the worst is over, it
could be months before there is a return to growth, a survey
showed.

But broader economic optimism supported risk-sensitive
currencies and pushed down the dollar.

Oil retreated after briefly jumping above $40 a barrel, the
highest since March, as doubts emerged about the timing and
scale of a potential extension to the pact between the
Organization of the Petroleum Exporting Countries and its allies
to cut crude supplies.

U.S. crude rose 48 cents to settle at $37.29 a
barrel. Brent settled up 22 cents at $39.79 a barrel.

The dollar index fell 0.272% while the Japanese yen
weakened 0.24% versus the greenback to 108.96 per dollar.

Spot gold fell 0.6% to around $1,717 per ounce.

Germany's ten-year government bond yield rose to its highest
since mid-April as the global risk-on mood saw demand for safer
debt decline, but then slipped back slightly to -0.399 by 1100
GMT.

The European Central Bank is expected to ramp up stimulative
bond purchases when it meets on Thursday.

Benchmark 10-year notes rose 8.6 basis points to
yield 0.7672%.

(Reporting by Herbert Lash; Editing by Bernadette Baum)

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