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GLOBAL MARKETS-Wall Street heads for subdued start ahead of jobless claims

Published 03/12/2020, 11:56 pm
Updated 04/12/2020, 12:00 am
© Reuters.
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* European shares weaken as vaccine advances digested

* Euro zone economic data highlights COVID pain

* U.S. stimulus package, Brexit trade talks eyed

* U.S. dollar hits 2 1/2-year lows

By Huw Jones

LONDON, Dec 3 (Reuters) - Wall Street was headed for a subdued start on Thursday as investors waited for fresh clues on the economy from jobless claims, hoping the data will help persuade Congress to finally agree on a COVID-19 stimulus package.

E-Mini futures for S&P500 ESc1 were flat, in line with European markets.

Stocks had risen to global record highs, pushing down the dollar as investor appetite for risk recovered on news that a vaccine for COVID-19 was imminent, starting in Britain next week.

The U.S. Food and Drug Administration is holding its advisory committee meeting next week, and New York Governor Andrew Cuomo has said the state's first vaccine delivery, enough for 170,000 residents, is expected on Dec. 15.

"Markets have pulled forward and bridged the gap between where we were pre-vaccine and where we are going to be when everyone has got the shot," said Ned Rumpeltin, European head of currency strategy at TD Securities.

"It puts a floor under the long-term risks, but there are plenty of short-term ones in the interim that we need to sort out," Rumpeltin said.

Signs of continued scarring are expected in the latest U.S. weekly initial jobless claims figures due at 1330 GMT, with a Reuters poll expecting 775,000 claims in the week ended Nov. 28, from 778,000.

Surveys on the huge U.S. services sector and car sales are also due later in the morning.

The dollar index slipped 0.2% to a two-and-a-half-year low of 90.774 =USD on Thursday. The MSCI's gauge of stocks across the globe .MIWD00000PUS hit another record high.

There is still no deal yet in the U.S. Congress on a $908 billion boost to the world's biggest economy. END GAME

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.

Sterling GBP=D3 clung to $1.34 thanks to dollar weakness and hopes that Britain can strike a Brexit trade deal with the EU before the UK's exit from the single market on Dec. 31.

The STOXX index .STOXX of European companies was slightly lower, dragged down by a 0.4% drop in Frankfurt .GDAXI and Paris .FCHI blue chips. The FTSE 100 .FTSE hit June highs.

COVID's effects were evident in Europe on Thursday. The IHS Markit's composite PMI, considered a guide to economic health, sank to 45.3 in November from October's 50.00, the level separating growth from contraction.

But optimism recovered on hopes raised by a vaccine, the IHS Markit survey showed. zone government bonds held ground on Thursday with Germany's 10-year bund yield down about 1 basis point to -0.53% DE10YT=RR .

Asian shares were mixed on Thursday after a choppy day of Wall Street trade, thanks in part to a disappointing U.S. jobs report.

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. AUD=D3 NZD=D3

"Currency investors are taking on more risk following the latest vaccine breakthroughs, options show," Morgan Stanley (NYSE:MS) said in a note.

In Asia, Japan's Nikkei .N225 was unchanged while South Korea's KOSPI .KS11 and Australia's benchmark index .AXJO were about 0.4% higher each. Chinese shares opened lower, with the blue-chip CSI300 index .CSI300 off 0.2%. New Zealand shares .NZ50 were weaker, too.

Overnight, Wall Street eventually ended higher. The Dow Jones .DJI and the S&P 500 .SPX gained 0.2%. The tech-heavy Nasdaq .IXIC was little changed.

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. O/R

Brent crude LCOc1 was down 9 cents at $48.16 a barrel while U.S. light crude CLc1 eased 14 cents to $45.14.

Gold was up at $1,832.6 an ounce XAU= .

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