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Oil and euro slip, markets tense over COVID-19 restrictions in Europe

A man wearing a protective face mask after a coronavirus outbreak speaks on his cellphone in front of a screen showing the Nikkei index outside a brokerage firm in Tokyo, J -an, Feb.26, 2020. REUTERS / Athit Perawongmetha / File Photo

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  • Brent futures drop to 7-week lows
  • AUD care losses; EUR under $ 1.13. held
  • China is keeping LPR stable as expected

SYDNEY, Nov 22 (Reuters) – Asian stocks got off to a weak start on Monday, while oil and the euro came under pressure amid the return of COVID-19 restrictions in Europe and talks about accelerating the Fed’s throttling Investors embarrassed on guard.

Oil futures initially slipped about 1%, bringing Brent crude and US crude to seven-week lows of $ 78.05 and US crude, respectively.

Australian stocks fell 0.4%, led by losses in banks. J -an’s Nikkei (.N225) lost 0.3% and MSCI’s broadest index for Asia Pacific stocks (.MI -J0000PUS) was unchanged.

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

“It’s hard to imagine the US dollar hurting against this backdrop,” he said, a view further underscored by recent strong US data and restrictive comments from Fed officials.

The euro slipped 0.2% to $ 1.1280, near a 16-month low. The common currency has been the main driver in the markets in recent sessions as investors bet that the European economy will lag far behind the US recovery.

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

On Monday, the benchmark ten-year US Treasury bond yield was constant at 1.5634%. Gold found support at $ 1,845 an ounce. The yen was hovering 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 competitors with rising prospects for memory chip demand.

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

HAVEN PLAYS

Trading will likely be thinned out until Thanksgiving in the US this week, but the cautious tone has traders again monitoring COVID-19 cases in Europe and keeping an eye on central bank spokesmen, particularly in the UK and Europe.

Austria began its fourth lockdown on Monday – with neighboring Germany warning it could follow – as protests against restrictions raged across the continent. Continue reading

Polls in Europe and the UK later this 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 FX Strategy.

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

Meanwhile, the US economy surprised analysts in recent weeks with unexpectedly strong retail sales and hot inflation. The focus this week is on prices and the labor market and what the Fed could do about its strength.

Fed vice chairman Richard Clarida said last week that it might be worth discussing the pace of t -ering at the December meeting. Fed minutes are due on Wednesday.

China on Monday, as expected, met its benchmark lending rates on corporate and household lending for a 19th month.

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

Bitcoin was under pressure after seeing its worst week in two months last week, most recently trading at $ 58,180.

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Reporting by Tom Westbrook in Sydney; Additional coverage from Joori Roh in Seoul; Ad -tation by Himani Sarkar

Our Standards: The Thomson Reuters Trust Principles.

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