In This Article:
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asia ex-Japan dips, Nikkei aided by yen pullback
* Dollar clings to Friday bounce, after punishing July
* Gold reaches new peak, eyeing $2,000 level
By Wayne Cole
SYDNEY, Aug 3 (Reuters) - Asian shares and the dollar made a cautious start to the new month on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan and a global surge of new coronavirus cases showed no sign of abating.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2%, though that was from a six-month top. Japan's Nikkei added 1.1% courtesy of a pullback in the yen, while South Korea shares eased 0.3%.
E-Mini futures for the S&P 500 dithered either side of flat.
Investors were nervous at the lack of a new stimulus package in the United States with White House Chief of Staff Mark Meadows not optimistic on reaching agreement soon on a deal.
On Friday, Fitch Ratings cut the outlook on the United States' triple-A rating to negative from stable, citing eroding credit strength and a ballooning deficit.
The credit rating agency also said the future direction of U.S. fiscal policy depends in part on the November election and the resulting makeup of Congress, cautioning there is a risk policy gridlock could continue. Strong results from tech giants helped the S&P 500 climb 5.5% last month, while the NASDAQ rose 6.8%. Other sectors, however, did not fair nearly as well as many states rowed back on opening their economies in the face of surging infections.
"Amid improvements in business sentiment, signals are emerging that the initial boost from pent-up demand is fading and consumer confidence is slipping lower," wrote economists at Barclays in a note.
"Together with concerns about labour market and virus developments, this clouds the outlook and could be exacerbated if U.S. fiscal support is not renewed in time."
Much will depend on what key data show this week including the ISM survey of manufacturing later on Monday and the crucial payrolls report on Friday.
The uncertainty saw benchmark 10-year Treasury yields hit their lowest since March at 0.52% last week and were currently just a fraction higher at 0.53%.
The 10-year real rate has broken below -1% for the first time amid a marked flattening of the yield curve as investors wager on yet more accommodation from the Federal Reserve.
That took a heavy toll on the U.S. dollar which suffered its worst monthly drubbing in a decade in July even after rallying on Friday as bears took profits on crowded short positions.