Oil and euro slip, markets on edge over COVID-19 curbs in Europe – Community News
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Oil and euro slip, markets on edge over COVID-19 curbs in Europe

A man wearing a protective face mask talks on his mobile phone in front of a Nikkei index screen outside a real estate agency in Tokyo, Japan, Feb. 26, 2020 after a coronavirus outbreak. REUTERS/Athit Perawongmetha/File Photo

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  • Brent futures fall to seven-week low
  • AUD nurse losses; EUR held below $1.13
  • China keeps LPR stable, as expected

SYDNEY, Nov 22 (Reuters) – Asian stocks started the week softly on Monday, as oil and the euro came under pressure as the return of COVID-19 restrictions in Europe and rumors of accelerated winding down of US Federal Reserve investors on the flight continued Watching.

Oil futures fell about 1% on opening, sending Brent crude and US crude to seven-week lows of $78.05 and $74.76 respectively amid oversupply concerns.

Australian equities fell 0.4%, mainly due to the loss of bank shares. Japan’s Nikkei (.N225) fell 0.3% and the broadest MSCI index of Asia-Pacific stocks (.MIAPJ0000PUS) remained flat.

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“The resilience of Europe and the European economy are questioned, exacerbated by protests and infection rates over the weekend,” said Rodrigo Catril, a strategist at National Australia Bank in Sydney.

“It’s hard to see the US dollar doing damage against that backdrop,” he said, a stance underlined by recent strong US data and aggressive comments from Fed officials.

The euro fell 0.2% to $1.1280, close to its 16-month low. The single currency has been the driving force in markets in recent sessions as investors bet that the European economy will lag well behind the US recovery.

Safe-haven assets such as bonds, gold and the yen have also benefited from the recent cautious tone in financial markets.

On Monday, the benchmark 10-year US Treasury yield held steady at 1.5634%. Gold found support at $1,845 an ounce. The yen has fluctuated at 114.09 per dollar.

The risk-sensitive Australian dollar also fell to a seven-week low of $0.7227. South Korean stocks (.KS11) were an outlier as chipmakers followed US peers that were higher with better prospects for memory chip demand.

S&P 500 futures rose 0.2% after Wall Street indices fell Friday.

PORT PLAYS

Trade is likely to be thinned out this week by Thanksgiving in the United States, but the cautious tone is making traders again monitor COVID-19 cases in Europe and keep an eye on central bank speakers, particularly in Great Britain and Europe.

Austria began its fourth lockdown on Monday — with neighboring Germany warning it could follow suit — as protests against restrictions erupted across the continent. read more

Surveys conducted in Europe and the UK over the course of the week are expected to show a downward trend in production and sentiment.

“The combination of COVID, growth and geopolitical concerns in the Eurozone supports safe havens,” said Jane Foley, Rabobank’s head of currency strategy.

“The recent breach below the EUR/USD $1.15 level and the downward movement that followed has forced us to lower our forecasts for the currency pair further,” she added, expecting it to hit around $1 by the middle of next year. ,12 will lie.

Meanwhile, the US economy surprised analysts with stronger-than-expected retail sales and high inflation in recent weeks. The focus this week is on prices and the labor market and what the Fed could do about their strength.

Fed Vice Chair Richard Clarida said last week it’s worth accelerating the pace of winding down at the December meeting. The Fed minutes are expected on Wednesday.

As expected, China maintained its benchmark interest rates on loans to businesses and households on Monday for the 19th month.

Central banks in South Korea and New Zealand are expected to hike rates this week, pricing swap markets with a roughly 40% chance of a 50 basis point rate hike in New Zealand.

Bitcoin was under pressure after posting its worst week in two months last week, last standing at $58,180.

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Reporting by Tom Westbrook in Sydney; Additional reporting by Joori Roh in Seoul; Editing by Himani Sarkar

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