MORNING BID-COVID but also corporate earnings

·2 min read

A look at the day ahead from Sujata Rao More than 5 million COVID cases emerged globally in the past week and hospitals from Brazil to India to Germany are overwhelmed. Political sabre-rattling continues too, from the south China Sea to the Ukraine/Russia border and the Black Sea.

Yet stock markets march blithely on, focusing on the earnings season which so far has seen 80% of U.S. companies beat forecast. U.S. Treasury yields are 20 basis points below recent highs and the dollar is near a one-month low.

That's support world stocks at record highs; Chinese markets jumped more than 2% while European and U.S. equity futures herald new all-time highs to be breached later in the day.

But the prospects of a COVID-linked economic setback are real. They are reflected in energy prices under pressure following last week's 6% rise. Currencies such as the Indian rupee are under pressure, notwithstanding dollar weakness. Shares in Indian banks too are under a cloud due to the risk of an asset quality hit.

On the corporate front, U.S. giants IBM and Coca-Cola will report earnings.

In Europe, the main focus is on an ABN Amro money laundering probe, with the Dutch Bank to pay $574 million in fines. More interesting is the resignation of Danske Bank CEO Chris Vogelzang, who was named as a suspect despite his mandate in 2019 to steer the lender through one of the world's biggest money-laundering scandals.

Following a weekend 14% slump, Bitcoin has managed to claw back much of the fall which is blamed on a Chinese power blackout.

Finally, football fans are lamenting plans for a breakaway super league by 12 top European clubs but not much reaction so far in clubs' share prices.

Key developments that should provide more direction to markets on Monday:

-Japan's exports posted their strongest growth in more than three years in March

- Asking prices for UK houses hit new high after tax cut extended - Rightmove

-Irish finance minister Donahue and central banker Gabriel Makhlouf speak

- Canadian Finance Minister Chrystia Freeland will present the first federal budget in two years

- Emerging markets: Israeli, Ukrainian central banks meet

- Germany's Green party to present first chancellor candidate in the 41-year history of their party.

(Reporting by Sujata Rao; editing by Dhara Ranasinghe)