LONDON / TOKYO (Reuters) – Global equities dipped Friday after slippery Chinese economic data, worrying about a delay in US fiscal stimulus that discouraged some investors from taking risks.
FILE PHOTO: A pedestrian in front of London Stock Exchange offices in City of London, UK, December 29, 201
European stocks were also pulled lower by a hit on the travel stock after Britain added more European countries to its quarantine list.
The pan-European STOXX 600 was down 0.7%, although it was on track to win another week on an ongoing basis.
MSCI’s world index was 0.2% lower and drifted from all highs touched in February. The index has still risen close to 50% since the March trough in the wake of the COVID-19 pandemic.
“The rally was exaggerated and most of the good news is already priced in,” said Francois Savary, Chief Investment Officer at Swiss asset manager Prime Partners.
“There is no more positive than expected revenue, and we are back on the macro background and checking the data regularly to see if the recovery is sustainable. Markets price a lot of good news and we are entering a period of volatility when the US election comes up. ”
The preliminary European employment and GDP numbers, which fall due at 0900 GMT and US retail sales figures at 1230 GMT, will be monitored for signs of divergence between US and European recoveries.
Data showing a slower-than-expected rise in Chinese industrial production and a surprising drop in retail sales are putting Asian stocks on their feet.
MSCI’s broadest index of Asia-Pacific equities outside Japan fell 0.1%, although equities in Japan rose 0.2%.
Chinese stocks rose 1.5% in untraded trade, with data suggesting domestic demand is still struggling after the coronavirus outbreak.
E-mini-futures for the S&P 500 were flat.
The reference German 10-year Bund interest rate fell to -0.42% after rising in three sessions and after hitting a six-week high in early trading.
Yields on US government bonds remained high after an auction of 30-year bonds on Thursday met weak demand.
Additional stock gains are likely to be limited as investors await progress in US economic stimulus negotiations, which is necessary to prevent a new recovery in the world’s largest economy from slipping in reverse.
Some traders stuck to the sidelines before a meeting between U.S. and Chinese officials on their Phase 1 trade deal on Saturday.
Spot gold fell 0.35 to $ 1,947.43 as high US financial returns prompted investors to revise their positions. Bullion has fallen more than 4% so far this week, with its largest weekly percentage falling since early March.
Data on Thursday showed that the number of Americans seeking unemployment benefits fell below one million for the first time since the start of the pandemic, but was not enough to change economists’ views that the labor market is faltering.
US Treasury yields also supported the US dollar, which remained stable at 106.90 yen and $ 1.1812 against the euro.
The dollar index was heading for an eighth consecutive week of losses, its longest weekly loss stretch since June 2010.
Oil edged further below $ 45 per barrel. Barrel in the midst of concerns about repayment of supply and increasing supply. Brent crude fell 0.7% to $ 44.67, returning to this week’s gains. US West Texas Intermediate slipped 0.6% to $ 41.99. [O/R]
Additional reporting from Lawrence Delevingne of Boston; Editing Kirsten Donovan