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Markets were keeping an eye on talks between Britain and the
European Union on a trade deal, with less than a month to go
before the UK's full departure from the EU.
Global stocks reached record highs, sending the dollar lower as
investor appetite for riskier assets was whetted by news that
Britain would start rolling out a COVID-19 vaccine next week,
lifting prospects for economic recovery.
The dollar index slipped to a two-and-a-half-year low of 90.948
on Thursday and was last at 90.968. The MSCI's gauge of stocks
across the globe hit another record high.
"The UK stole a march on the rest of Europe and we had a little
bit of a feel-good factor yesterday. I am a lot more optimistic
about equity markets than I was a month ago," said Michael
Hewson, chief market analyst at CMC Markets.
The STOXX index of European companies was flat, dragged down by
a 0.2% drop in Frankfurt and Paris blue chips. The FTSE 100 hit
June highs.
Investors hope that a fresh round of weak economic data in
Europe and the United States will finally persuade policymakers
to agree the stimulus packages that have so far eluded them.
There is still no deal yet in the U.S. Congress on a $908
billion boost to the world's biggest economy, and the EU has yet
to nail down an economic package agreed in principle as the euro
zone economy struggles.
The IHS Markit Purchasing Managers' Index (PMI) for November in
Spain shrank to 39.5 - below the 50 level separating growth from
contraction. Italy's services contracted for a fourth month
running, with the IHS Markit Business Activity Index for
services dropping to 39.4.
CMC's Hewson said such figures were "abysmal" and likely to
remain below 45 until January.
A Reuters polls forecast the euro zone economy would shrink
again this quarter as renewed lockdown measures stifled
activity, with the economy taking two years to regain pre-crisis
levels.
Euro zone government bonds held ground on Thursday with
Germany's 10-year bund yield down about 1 basis point to -0.53%.
BREXIT END GAME
Britain's education minister, Gavin Williamson, said good
progress was being made in talks with the European Union on a
trade deal as the Brexit deadline approaches. Irish Foreign
Minister Simon Coveney said he believed there was a good chance
of a deal within days.
Sterling clung on to $1.34 thanks to broad dollar weakness, but
derivative markets were flashing red on doubts that Britain can
strike a Brexit trade deal with the EU before the UK's exit from
the single market on Dec. 31.
Asian shares were mixed on Thursday after a choppy day of Wall
Street trade, thanks in part to a disappointing U.S. jobs
report.
The U.S. Food and Drug Administration is holding its advisory
committee meeting next week, while New York Governor Andrew
Cuomo has said the state's first vaccine delivery, enough for
170,000 residents, is expected on Dec. 15.
Hopes that the pandemic will finally be brought under control
sparked a risk-on rally in currency markets with the Australian
and New Zealand dollars advancing.
"Currency investors are taking on more risk following the latest
vaccine breakthroughs, options show," Morgan Stanley said in a
note.
E-Mini futures for S&P500 were flat.
In Asia, Japan's Nikkei was unchanged while South Korea's KOSPI
and Australia's benchmark index were about 0.4% higher each.
Chinese shares opened lower, with the blue-chip CSI300 index off
0.2%. New Zealand shares were weaker, too.
Overnight, Wall Street eventually ended higher. The Dow Jones
and the S&P 500 gained 0.2%. The tech-heavy Nasdaq was little
changed moved.
In commodities, oil prices slipped on Thursday as producers
including Saudi Arabia and Russia locked horns over the need to
extend record production cuts set in place in the first wave of
the COVID-19 pandemic.
Brent crude was down 9 cents at $48.16 a barrel while U.S. light
crude eased 14 cents to $45.14.
Gold was up at $1,832.6 an ounce.
(Additional reporting by Swati Pandey in Sydney and Jessica
DiNapoli in New York; editing by Stephen Coates, Larry King)
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