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Gold extends run of record highs

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World stocks just below all-time high

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Japanese yen makes all the running in FX markets

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Five years since COVID first tore into markets

By Marc Jones

LONDON, Feb 20 (Reuters) - Traders were marking five

years since COVID first rocked world markets and one month since

Donald Trump's return to the White House started shaking up the

global order on Thursday - and there was plenty to keep tabs on.

Record-high gold was nearing $3,000 per ounce on concerns

Trump will unleash a global trade war, the yen stomped higher on

bets of more BOJ interest rate hikes, while Ukraine's bonds

tumbled on worries about its future.

The dollar had been weakened overnight by news the Federal

Reserve's policymakers had discussed slowing or pausing the

drawdown of its bloated balance sheet and stocks hit the brakes

as the tariff warnings offset Wall Street's latest record high.

Saxo Bank's John Hardy said the day's big move was the yen's

pacey rise. It hit a more than two-month high against the dollar

and briefly dropped below 150. It was also up more

than 1% versus the euro and set for its biggest

daily jump since late January.

"I'm just wondering whether this a bit of a lightbulb moment

for traders," Hardy said.

Key inflation data is due in the coming days, "there is a

geopolitical angle there too perhaps in that they don't want to

get attention from the Trump administration for their

exceedingly low policy (interest) rate.

European stocks edged up in morning trading, as upbeat

corporate updates in the industrial and insurance sectors offset

declines in energy and healthcare stocks.

Germany's DAX ticked up 0.6% as data there showed

that producer prices rose less than expected in January.

Europe's biggest economy is also bracing for a snap election

at the weekend, following the collapse of Chancellor Olaf

Scholz's three-way coalition, with analysts anticipating a

Conservative-led two-party coalition.

DICTATOR TRADE

U.S. futures pointed to a more muted open later with both

the S&P 500 and Nasdaq pointing 0.3% lower.

Trump's latest tariff warning on Wednesday focused on

pharmaceuticals, semiconductor chips and wood. He also intends

to hit car imports as soon as April 2.

That along with other threats has exacerbated fears of a

broad trade war, leaving investors nervous.

Ukraine's government bonds took another tumble too after

Trump had caused widespread alarm on Wednesday when he called

Ukrainian President Volodymyr Zelenskiy a "dictator" and that he

needed to grab a ceasefire deal quickly or risk having no

country left.

"Uncertainty about the Fed's policy and Trump's tariffs will

continue to rattle markets," said Vasu Menon, managing director

of investment strategy at OCBC Bank in Singapore.

"Investors must come to terms with the fact that

volatility will be more elevated this year"

In Asia, Japan's Nikkei slid 1.5% on the strong yen,

while a blistering rally in Chinese technology shares

took a breather.

Hong Kong's Hang Seng Index slipped 1.3%, having

touched a four-month high earlier this week boosted by tech

stocks in the wake of Chinese startup DeepSeek's breakthrough.

Gold prices showed no signs of slowing though. They rose to

a fresh record high of $2,947 an ounce, reaching a new peak for

the tenth time this year. The precious metal is now up

12% in 2025 after rising 27% last year, its best performance in

over a decade.

In the oil markets Brent crude futures were little changed

at $76 a barrel while wheat prices extended their gains

to a fifth session, underpinned by worries that cold weather in

Russia, Ukraine and the U.S. could crimp supply.