* Oil suffers as USO ETF sells front-month futures
* Petrocurrencies dragged under
* Ugly company reports fail to derail stocks
* End in sight for some lockdowns
* Markets eye Fed, ECB meetings this week
* World FX rates in 2020 tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, April 28 (Reuters) - World stocks jetted to their highest in almost six weeks on Tuesday as plans to ease coronavirus lockdowns in a number of major economies helped offset more chaos in oil markets and warning of mounting bad credit at HSBC and Santander.
Oil major BP had said it had suffered a near 80% plunge in profits too but with Wall Street futures over 1% higher it was the relatively good news, rather than the bad or plain ugly that investors seemed focused on.
Plans to ease major economies out of coronavirus lockdowns were continuing, reassuring UBS earnings lifted European banks nearly 6% while Italy’s bonds recovered further after it had dodged a damaging credit rating downgrade on Friday.
“The general mood seems to be definitely more positive today,” said CMC markets senior analyst Michael Hewson, highlighting that investors now viewed the peaks of coronavirus infections in Asia, Europe and North America as behind them.
“They are banking on a v-shaped recovery (in the global economy)... so the line of least resistance is for stock markets to go higher especially when central banks have got their pedals hard to the floor.”
The near 2% jump in European stocks and the rise from Wall Street later meant MSCI’s 49-country index of world stocks was extending the more than 25% rebound it has made since hitting near four-year lows last month.
Oil remained total carnage though. U.S. WTI, which went negative last week, was down 10% having dived as much as 20% earlier after a scramble by the United States Oil Fund (USO) , the largest oil-focused U.S. exchange-traded product, to shift its holdings had underscored the dwindling capacity to store excess supply.
Benchmark brent Brent went down a more manageable 5% and had largely recovered by the time U.S. trading began, but it was still at only $20 a barrel which is way below where even the most efficient producer countries can balance their finances.
Petrocurrencies were whiplashed too. Canada’s dollar and the Norweigen crown both recovered from early falls with the crown tearing up as much as 1.4%.
Russia’s rouble also bounced back 0.5%, while Brazil’s battered real sprang up 1.2% along with Mexico’s peso and a host of other emerging market currencies that only tend to well when investors are feeling confident.
“Normally, a lower oil price disproportionately boosts consumer sentiment. However, the storage problem is due to reduced oil demand - if you are not putting petrol in your car, you will not notice the price,” UBS Chief Economist Paul Donavan said.
“The good news is that the money saved by not buying petrol now may be spent later in the economic bounceback.”
Away from wild oil, there were signs that the market volatility gauges that have been triggered by the rapid spread of the coronavirus over the last few months were also easing.
The U.S. stock market’s so-called fear gauge, the VIX , was at its lowest in a month and the U.S. dollar was softer against other major currencies like the euro which stood up at $1.0880..
Markets are looking for any forward guidance from the U.S. Federal Reserve, which meets later on Tuesday and is due to issue a statement on Wednesday. The European Central Bank then meets on Thursday.
The Fed has led the global monetary policy response to the coronavirus pandemic by cutting interest rates to zero and aggressively buying bonds and corporate credit - a programme it extended overnight to include municipal debt of smaller U.S. cities.
Analysts said it was unlikely that the Fed would make further major policy moves, given the scope and depth of recent action to counter the economic damage caused by COVID-19.
Sweden’s central bank had opted not to take its interest rates back into negative territory on Tuesday, sending its currency up 0.5% and to its highest in over a month.
“The major central banks are at comparatively expansionary levels. All of them have beefed up asset purchases as much as they could. All of them are close to or even at the minimum lower interest rate bound,” wrote Thu Lan Nguyen, an analyst at Commerzbank.
“They are likely to remain there for the foreseeable future, which would point towards relatively stable exchange rates.”
The ECB has had less room to manoeuvre on rates and announced an enormous bond-buying program. Still, bickering and indecision over a eurozone rescue package has some in the market expecting deeper action still, perhaps as soon as Thursday.
That has seen the euro left behind as expectations for an economic recovery from the pandemic has pressured the U.S. dollar and driven a rally in riskier currencies such as the Australian dollar.
The Aussie dollar briefly spluttered as oil went wacky again but regained its poise to add to its near 20% bounce from a 17-year low struck last month.
Elsewhere the pound rose 0.6% to $1.25, having earlier been pressured after Prime Minister Boris Johnson warned it was too dangerous to relax a strict lockdown in Britain.
Additional reporting by Tom Wilson in London, Editing by Angus MacSwan and Philippa Fletcher