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US Index Futures, European Stocks Suffer Pandemic Nerves As First Half Closes

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LONDON – US index futures and European equities weakened on Wednesday and global equities fell back from recent record highs as markets turned jittery from the pandemic again before the end of the year and key data. US employment

Asset markets have been boosted over the past year by trillions of dollars of monetary and fiscal stimulus from central banks and governments around the world in response to COVID-19, while vaccination deployments in recent months are boosting the economic outlook.

“The search for performance is a very powerful force. He doesn’t have the narrative right now to stop it, ”said Sebastien Galy, senior macroeconomic strategist at Nordea Asset Management.

But stocks trimmed some gains on the final trading day of the month and a half year, amid concerns about the most infectious Delta variant of the coronavirus first identified in India.

“At the end of the month there may be a rebalancing,” said Giuseppe Sersale, fund manager at Anthilia in Milan. “My impression is that there is fear about the impact of the Delta variant in the summer season in Europe.”

Indonesia, Malaysia, Thailand and Australia are fighting pandemic outbreaks and tightening restrictions, and Spain and Portugal announced restrictions for unvaccinated British tourists.

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US S&P futures tumbled 0.13% after booming US equities trading overnight as US consumer confidence jumped to its highest level in nearly 1 and a half years in June.

Growing optimism in the job market as the economy reopened offset concerns about higher inflation.

But European stocks suffered steeper losses, falling 0.89%. German stocks fell 1.4% and British stocks fell 0.67%.

However, the European benchmark, which hit all-time highs this month, is still on track to post its biggest percentage gain in the first half since 1998.

Eurozone inflation declined in June in line with forecasts, but is expected to move well above the European Central Bank’s target by autumn due to higher commodity prices.

The yield on Germany’s 10-year government debt fell 2.2 basis points according to the data to -0.194%.

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The MSCI Global Stock Index fell 0.18%, but was set for a fifth consecutive month of gains, a day after hitting an all-time high, and for an increase of more than 11% in the first half.

EYES ON PAYROLL

Markets are focusing on US private payroll data later Wednesday, ahead of Friday’s release of US non-farm payroll data that could influence Fed policy. Federal.

Economists polled by Reuters forecast that Wednesday’s private payrolls would show a gain of 600,000 in June, a slowdown from a month ago when 987,000 jobs were created.

For the most comprehensive employment figures on Friday, economists polled by Reuters had expected a gain of 690,000 jobs for June, up from 559,000 in May, but the variation between the 63 estimates was large, from 400,000 to more than a million.

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The benchmark 10-year US Treasury yield fell more than 2 basis points to 1.4528%.

The dollar was heading for its best monthly gain since March, mainly on the back of a surprisingly aggressive change in the Fed’s rate outlook.

A “very optimistic” Fed governor, Christopher Waller, said Tuesday that he may need to start cutting his bulk asset purchase program as early as this year to allow the option of raising interest rates by the end of 2022. .

The dollar index was up 0.06% at 92.123, with the yen stable at 110.49 and the euro was down 0.1% at $ 1.1882. The British pound was up 0.17% at $ 1.3859.

The MSCI index that tracks Asian stocks outside of Japan was set for a small monthly loss, but still on track for a fifth consecutive quarterly rise, its longest streak since 2006-07. The index fell 0.05%.

Chinese blue chips increased 0.65%. Japan’s Nikkei fell 0.07%.

Oil prices were heading for monthly and quarterly gains after some data suggested that US crude reserves were shrinking.

Brent crude was up 0.78% to $ 75.34 a barrel and US crude was up 1% to $ 73.93.

Spot gold lost 0.14% to $ 1,759.36 an ounce, heading for its biggest monthly decline since November 2016.

(Additional reporting by Danilo Masoni in Milan and Andrew Galbraith in Shanghai; Editing by John Stonestreet, Alex Richardson, Philippa Fletcher)

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In-depth reports on the economics of innovation from The Logic, presented in association with the Financial Post.

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