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GLOBAL MARKETS-Shares stabilise after worst week of year, Brexit stresses sterling

Published 2019-03-11, 09:38 a/m
© Reuters.  GLOBAL MARKETS-Shares stabilise after worst week of year, Brexit stresses sterling
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* China shares jump nearly 2 pct after c.bank pledges support

* European shares inch higher but German data weighs

* Pound slips amid talk of Brexit votes being downgraded

* Boeing (NYSE:BA) shares down almost 10 premarket after Kenya crash

* U.S. retail sales up in Jan, grim in Dec

* China lending, money supply data miss forecasts

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

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By Marc Jones

LONDON, March 11 (Reuters) - Talk of more stimulus from China helped world share markets regain some ground on Monday after a slew of disappointing economic data and growth warnings from central banks triggered their worst weekly performance so far this year.

China's main bourses made back almost half the 4 percent they lost in Friday's mauling as the central bank chief pledged more support, but not everywhere was so sprightly. falling every day last week, Wall Street .N opened modestly higher as retail sales figures provided some reassurance. meanwhile managed only a 0.3 percent gain .STOXX as an unexpected drop in German industrial data also pinned the euro near a 20-month low. /FRX GVD/EUR

London's FTSE .FTSE made a fraction more but that was partly the flip side of the pound pinballing between a near three-week low of $1.2950 and $1.3060 as the chances of Prime Minister Theresa securing lawmakers' support for her Brexit deal appeared to dim. GBP/

Britain is currently on course to leave the EU in 18 days without a transition deal in place to minimise economic disruption, although UK lawmakers could push for a delay if May's deal fails this week.

Berenberg economist Kallum Pickering said a delay would be modestly positive for sterling, although "it would not completely eliminate the hard Brexit risk which could still come at the end of a delay or as a result of a second referendum".

Norway's crown NOK= gained after strong inflation data raised rate hike expectations, with Nordea strategists saying a March move by the Norges Bank was "a complete done deal".

With market volatility low, investors have rushed to buy currencies where central banks are still raising rates or economic data has pointed to a brighter economic outlook.

Optimism about Norway contrasted with caution over the euro zone economy after the European Central Bank last week slashed growth forecasts and postponed its likely first rate hike.

Short euro bets, already near a 2-1/2 year high according to latest futures positioning data, are likely to receive a further boost, investors said.

The single currency EUR=EBS was shuffling around $1.1240 after falling 1.2 percent last week, its biggest weekly loss in more than six months.

BOEING DOWN

The dollar .DXY was also flat as Wall Street made a marginally brighter restart after 2019's worst week to date .N .

U.S. retail sales unexpectedly rose 2.3 percent year-on-year rise in January having been forecast to be broadly flat but that was offset by a revision to December's figures to show the worst drop since 2009. BA.N tumbled nearly 10 percent in premarket trading after a host of airlines grounded the world's biggest planemaker's new 737 MAX 8 passenger jet following the second deadly crash in just five months. Ethiopian Airlines crash followed one flown by Lion Air in October. Boeing has already accepted orders for more than 5,000 of the new, high-fuel-economy planes, which entered service less than two years ago and are set to be the workhorses for airlines around the globe for decades. BOUNCES

Overnight, MSCI's broadest Asia-Pacific index .MIAPJ0000PUS had climbed 0.4 percent, paring a quarter of Friday's 1.6 percent fall.

Japan's Nikkei .N225 gained 0.5 percent after four consecutive sessions in the red .T though the big mover was China again as the blue-chip CSI300 index .CSI300 jumped 1.9 percent after a mix of woes had seen it slump 4 percent on Friday. .SS central bank on Sunday pledged further support by spurring loans and lowering borrowing costs. It came as data showed new bank loans fell a bit more than expected in February, while money supply growth also missed forecasts. markets, meanwhile, were still trading last week's ECB change of tack and Friday's news that the U.S. economy created only 20,000 jobs in February, the weakest reading since September 2017.

As German Bund yields backed towards zero again, the 10-year U.S. Treasury last yielded 2.64 percent having hit a two-month low of 2.607 percent US10YT=RR .

The two-year U.S. yield US2YT=RR was also staying close to the Fed funds rate of around 2.40 percent USONFFE= . Fed funds futures 0#FF: are now pricing in a more than 20 percent chance of a U.S. rate cut this year.

"The headline (payrolls) reading was so weak that the market could have reacted more aggressively. I would say markets reacted relatively calmly because there were elements that suggest weakness is temporary," said Tomoaki Shishido, fixed income strategist at Nomura Securities.

Oil was the main focus for commodity markets after Saudi oil minister Khalid al-Falih indicated that an end to OPEC-led supply cuts was unlikely before June.

U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 0.7 percent to $56.52 per barrel. Brent futures LCOc1 went up 1 percent to $66.41 a barrel. O/R

Gold XAU= eased about 0.1 percent to $1,296.62 per ounce, after briefly breaching $1,300 for the first time since March 1 in the previous session. GOL/

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