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GLOBAL MARKETS-Stock rally stalls, oil and dollar march higher on trade hopes

Published 2019-11-05, 11:45 a/m
GLOBAL MARKETS-Stock rally stalls, oil and dollar march higher on trade hopes
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(Adds U.S. market open, byline, dateline; previous LONDON)

* China push to remove recent U.S. tariffs seen as positive

* Wall Street at all-time high puts damper on stock rally

* Bond yields rising globally as recession fears recede

By Herbert Lash

NEW YORK, Nov 5 (Reuters) - The U.S. dollar and crude prices rose on Tuesday, spurred by ongoing optimism a U.S.-China trade deal may be near, but a rally in global equity markets stalled as China pressed U.S. President Donald Trump to remove recently imposed tariffs.

MSCI's gauge of global stock markets set a fresh 21-month high before trading flat, and the Nasdaq and Dow Jones industrial average hit new intraday record peaks before U.S. stocks pared gains to trade little changed.

U.S. and European government bond yields climbed, lifted by trade optimism and more upbeat economic data, but China's push to remove more U.S. tariffs imposed in September as part of a "phase one" trade deal raised doubts and spurred profit taking.

"A phase one" trade deal is far from certain," said Fawad Razaqzada, technical analyst at FOREX.com in an investor note.

"So far it has just been promises of a deal underpinning both stocks and the yuan," he said. "It is possible that the rally in both markets will at the very least pause."

ISM's services data showed a reading of 54.7 in October from 52.6 the prior month, or above expectations of 53.4, according to economists polled by Reuters. The data was the latest to allay concerns of a slowdown in the U.S. economy.

MSCI's gauge of stock indexes in 47 countries .MIWD00000PUS shed 0.01% while the pan-European STOXX 600 index of small, mid-sized and large stocks .STOXX rose 0.10%.

On Wall Street, the Dow Jones Industrial Average .DJI rose 36.03 points, or 0.13%, to 27,498.14. The S&P 500 .SPX lost 1.62 points, or 0.05%, to 3,076.65 and the Nasdaq Composite .IXIC added 5.38 points, or 0.06%, to 8,438.58.

In Asia, optimism was helped by the People's Bank of China's cut in its a medium-term lending rate, the first since early 2016. It was only a token 5 basis points to 3.25%, but it underscored Beijing's ongoing desire to support the economy.

Oil prices rose more than 1% on hopes of a trade deal while gold fell more than 1%, en route to its biggest one-day dip in more than a month. O/R

Also driving crude higher were remarks by OPEC Secretary-General Mohammad Barkindo, who said the oil market outlook for 2020 may be brighter than previously forecast, appearing to downplay any need for deeper production cuts. crude LCOc1 futures for January delivery rose 88 cents to $63.01 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 76 cents to $57.30 a barrel.

The safe-haven yen and Swiss franc slid.

The dollar index .DXY , tracking the greenback against six major peers, rose 0.47%, with the euro EUR= down 0.54% to $1.1066. The Japanese yen JPY= weakened 0.50% versus the greenback at 109.14 per dollar.

Benchmark 10-year U.S. Treasury notes US10YT=RR fell 21/32 in price to yield 1.8619%.

Germany's 10-year bond yield rose as high as -0.308% DE10YT=RR , while the French 10-year hit -0.006% FR10YT=RR to within striking distance of positive territory.

https://tmsnrt.rs/2JMLMjB World stocks surge $10 in 2019

https://tmsnrt.rs/2JRIM5J

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