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GLOBAL MARKETS-U.S.-China trade talks optimism lifts shares, oil gains

Published 2018-08-20, 04:56 p/m
© Reuters.  GLOBAL MARKETS-U.S.-China trade talks optimism lifts shares, oil gains
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* Stocks rise in anticipation of U.S.-China trade talks

* Trump says "not thrilled" with Powell's rate hikes -Reuters

* Turkish lira under renewed pressure after ratings downgrades

* Oil prices gain on easing trade war concerns, sanctions on Iran

By Herbert Lash

NEW YORK, Aug 20 (Reuters) - A gauge of global equity markets rose on Monday on hopes U.S.-China trade talks this week will diffuse the dispute, while Turkey's lira fell anew on cuts to the country's credit ratings and after shots were fired outside the U.S. Embassy in Ankara.

Wall Street rose and broad-based gains in Europe and Asia lifted the MSCI's all-country world index .MIWD00000PUS , which tracks shares in 47 countries. The gauge has recouped last week's losses, but not declines of the prior week when the Turkish currency began its descent.

The dollar index fell on a report that U.S. President Donald Trump had told donors he was unhappy with the Fed's interest rate hikes. The greenback fell further in late trading and the S&P 500 pulled back from a session high after Trump told Reuters in an interview he was "not thrilled" with Fed Chairman Jerome Powell for raising rates.

Trump also accused China and Europe of manipulating their currencies. who nominated Powell last year to replace former Fed Chair Janet Yellen, told Reuters in an interview that he believed the U.S. central bank should be more accommodating.

"I'm not thrilled with his raising of interest rates, no. I'm not thrilled," Trump said in the interview.

In part of the interview that was published after Wall Street closed, Trump said he did not anticipate much coming from the U.S.-China talks. U.S. and Chinese officials are expected to meet this week in Washington to discuss trade. It was unclear whether the talks will affect tariffs. doesn't necessarily guarantee that there will be an immediate resolution," said Adam Phillips, director of portfolio strategy at EP Wealth Advisors in Torrance, California. "But it's certainly a positive development, and it's certainly something investors are focusing on."

Six days of public hearings on proposed U.S. duties of up to 25 percent will start Monday in Washington, as the Trump administration tries to pressure Beijing for sweeping changes to trade and economic policies. Holdings Ltd 0700.HK was the top gainer on Hong Kong's Hang Seng index .HSI , closing up 4.1 percent. It was the biggest contributor to MSCI's global stock gauge, which rose 0.53 percent. pan-European FTSEurofirst 300 index .FTEU3 closed up 0.57 percent and MSCI's emerging markets index .MSCIEF gained 1.18 percent. Wall Street, easing concerns over trade helped lift oil and metal prices. The S&P 500 energy sector .SPNY rose 0.66 percent, and the materials sector .SPLRCM was up 0.71 percent. O/R MET/L

The Dow Jones Industrial Average .DJI rose 89.37 points, or 0.35 percent, to 25,758.69. The S&P 500 .SPX gained 6.92 points, or 0.24 percent, to 2,857.05 and the Nasdaq Composite .IXIC added 4.68 points, or 0.06 percent, to 7,821.01.

Turkey's lira TRY=D3 fell 3.2 percent to a session low of 6.2 against the dollar and then pared losses to trade 1.25 percent down at 6.0851.

While the lira late last week clawed back sizable losses, it remains down 24.6 percent so far in August. sovereign dollar bonds fell across the curve on Monday and the cost of insuring exposure to Turkish debt rose. On Friday, Moody's and S&P Global lowered their sovereign credit ratings. were fired at the U.S. Embassy in Ankara, compounding U.S.-Turkish tensions as a dispute over Turkey's detention of an American pastor simmered. BANKS IN SPOTLIGHT

In a week light on economic data, investors are turning their attention to central banks.

The Fed on Wednesday will release minutes from its August policy meeting. Investors will scrutinize them for signs about the interest rate outlook.

The U.S. central bank is widely expected to raise rates a third time in September, though some analysts doubt a fourth hike will come in December. is due to speak on Friday at the annual economic symposium in August in Jackson Hole, Wyoming. really going to be all about the minutes and Powell at Jackson Hole on Friday," said Thomas Simons, a money market economist at Jefferies in New York.

The dollar index .DXY , which tracks the greenback against a basket of currencies, fell 0.29 percent.

The euro EUR= rose 0.34 percent to $1.1476 and the Japanese yen JPY= strengthened 0.33 percent at 110.15 per dollar.

Benchmark U.S. Treasury 10-year notes US10YT=RR rose 14/32 in price to push yields down to 2.8208 percent, a six-week low. futures rose after weeks of declines as investors grew more concerned about an expected fall in supply from Iran. crude LCOc1 futures rose 38 cents to settle at $72.21 a barrel while U.S. crude CLcv1 settle 52 cents higher at $66.43 per barrel.

U.S. gold futures GCcv1 for December delivery settled up $10.40 at $1,194.60 an ounce as a stronger Chinese currency made the metal cheaper for buyers in the world's biggest gold consumer. GRAPHIC-Global assets in 2018

http://tmsnrt.rs/2jvdmXl GRAPHIC-Emerging markets in 2018

http://tmsnrt.rs/2ihRugV GRAPHIC-World FX rates in 2018

http://tmsnrt.rs/2egbfVh GRAPHIC-MSCI All Country World Index Market Cap

http://tmsnrt.rs/2EmTD6j President Trump on the U.S. dollar

https://reut.rs/2nRy9V6

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