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Safe-havens rise on coronavirus concerns, stocks rebound

Published 2020-02-10, 11:49 a/m
© Reuters.  GLOBAL MARKETS-Safe-havens rise on coronavirus concerns, stocks rebound
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* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

* Coronavirus death toll climbs past 900, exceeds SARS toll of 774

* MSCI world index rebounds, Wall Street rallies

* U.S. dollar takes breather after rally last week

By Herbert Lash

NEW YORK, Feb 10 (Reuters) - Gold rose and the U.S. dollar hit a four-month high against the euro on Monday as the death toll from coronavirus outbreak passed that of the SARS epidemic two decades ago, boosting demand for safe havens.

Wall Street, however, rebounded on a strong U.S. economic outlook, with the Nasdaq hitting a record high.

Weak economic data in the eurozone made the dollar relatively more attractive than the single currency, especially considering Friday's U.S. non-farm payrolls report showing an acceleration in job growth in January.

Data on Monday showed Italian industrial output was much weaker than expected in December, another setback for the euro after data on Friday showed German industrial output suffered its biggest fall since the recession-hit year of 2009. gauge of global equity markets traded little changed, paring most losses after Wall Street rebounded in contrast to declining share prices in Europe, which also fell on concerns about the extent of the coronavirus.

"We have the safe-haven bid from the coronavirus. That is killing EM and really benefiting the dollar, and to a lesser extent the yen and Swiss," said Win Thin, global head of currency strategy at Brown Brothers Harriman in New York.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.06% while the pan-European STOXX 600 index .STOXX rose 0.06%.

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On Wall Street, the Dow Jones Industrial Average .DJI rose 101.67 points, or 0.35%, to 29,204.18. The S&P 500 .SPX gained 14.36 points, or 0.43%, to 3,342.07 and the Nasdaq Composite .IXIC added 67.76 points, or 0.71%, to 9,588.27.

Investors continued to monitor the advance of the deadly coronavirus, which has killed more than 900 people as of Sunday, mostly in China's provincial capital of Wuhan, the epicenter of the outbreak. carmaker Tesla Inc TSLA.O rose 2.6% as its Shanghai factory returned to service. across China trickled back to work after the extended Lunar New Year holiday. The government eased restrictions imposed to counter the coronavirus but the World Health Organization said the number of cases outside China could be just "the tip of the iceberg." dollar index .DXY rose 0.18%, with the euro EUR= down 0.29% to $1.0911. The Japanese yen JPY= weakened 0.01% versus the greenback at 109.79 per dollar.

Bond yields fell. The benchmark 10-year U.S. Treasury note US10YT=RR rose 5/32 in price to yield 1.5593%.

The full economic impact of the virus is still unknown but is expected to exacerbate a slowdown in the Chinese economy.

Treasury debt, which serves as a safe-haven investment in times of geopolitical and economic volatility, has been in demand since the start of the year. The 10-year Treasury yield US10YT=RR , which moves inversely to price, has fallen 17.8% since Dec. 31.

Shares overnight in Asia mostly fell. Japan's Nikkei .N225 was off 0.6%, South Korea's KOSPI .KS11 was 0.5% weaker while Australia's benchmark index .AXJO eased 0.14%.

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China's indexes were the only ones in the black in Asia, with the blue-chip index .CSI300 adding 0.4% and Shanghai's SSE Composite .SSEC up 0.5%.

Oil prices dipped on weaker Chinese demand due to the coronavirus outbreak and as traders waited to see if Russia would join other producers in seeking further output cuts.

Oil has dropped more than 20% from a peak in January after the spreading virus hit demand in the world's largest oil importer and fueled concerns of excess supplies.

Brent crude LCOc1 slipped 60 cents to $53.87 a barrel, while U.S. West Texas Intermediate CLc1 fell 49 cents to $49.83 a barrel or 0.5%.

U.S. gold futures GCcv1 were 0.2% higher at $1,576.80 an ounce.

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