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Stocks climb, investors seek enlightenment from Trump on trade

Published 2019-11-12, 08:59 a/m
© Reuters.  GLOBAL MARKETS-Stocks climb, investors seek enlightenment from Trump on trade
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* Shares bounce, Japan's Nikkei ends 0.8% higher

* Awaits Trump speech in New York for news on trade

* Reports Trump to delay auto tariffs on EU for 6 months

* Sterling gives back some gains after Brexit boost Monday

* World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

By Marc Jones

LONDON, Nov 12 (Reuters) - World shares and benchmark government bond yields inched higher on Tuesday, as investors awaited a speech by U.S. President Donald Trump on U.S. trade policy and an inevitable maelstrom of headlines.

Hopes for the speech were two-fold. Firstly, that there would be reassurances that China talks were progressing, and secondly, that there would be a nod to overnight reports that a decision on European car tariffs would be delayed for another 6 months. well as the slow grind higher in stocks - Europe was nudged back towards 4-year highs .EU and Wall Street was set to open steady .N - steepening bond market yield curves also signalled increasing confidence that recessions will be avoided.

Trade-sensitive chipmakers helped pushed Europe's STOXX 600 up 0.4% and U.S counterparts including Micron Technology MU.O , Nvidia NVDA.O and NXP NXPI.O rose between 0.6% and 0.9% in premarket New York trading. .N

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 0.5% overnight too, following a sharp 1.2% pullback on Monday.

Japan's Nikkei .N225 ended 0.8% higher after dithering for much of its session. But Shanghai blue chips .CSI300 eased 0.2% after bank lending growth undershot analysts' estimates, while Australian shares were down, too. positive signal on U.S.-China trade from Trump would likely satisfy traders even without specific details, said Rob Marshall-Lee, investment leader for Emerging Market and Asian Equities at Newton Investment Management.

"I think that there will be some kind of deal that comes of all of this," Marshall-Lee said, adding that whatever emerges, both Washington and Beijing would want to claim it as a win domestically.

Trump wrongfooted markets over the weekend when he said there had been incorrect reporting about U.S. willingness to lift tariffs on China. were also anxious about the situation in Hong Kong after a violent escalation of protests knocked 3% off the Hang Seng .HSI and nearly 2% off Asia-exposed banks HSBC HSBA.L and StanChart STAN.L in recent days.

Hong Kong's embattled leader Carrie Lam on Tuesday said protesters who were trying to "paralyse" the city were extremely selfish and hoped all universities and schools would urge students not to participate in violence.

The key Hang Seng index finished the day higher but Lam was speaking a day after police shot a protester and a man was set on fire in some of the most dramatic scenes in more than five months of civil unrest in Hong Kong. .SS

BORIS GETS BREXIT BOOST

Bond markets were also stirring again.

A partial holiday in the United States had closed the Treasury market on Monday but there was an early milestone on Tuesday as the gap between short-term 3-month and longer-term 10-year yields hit the widest level of the year so far.

That widening, or steepening of the 'curve' as it is also known, adds to signs that the fears that took hold earlier in the year that it was heading into recession, were receding again.

Treasury yields on 10-year notes US10YT=RR were back up at 1.95% having been dropping away from last week's three-month top of 1.97%. European yields were also a touch higher.

Views that auto tariffs will be postponed were largely priced into European government bonds, said Peter Chatwell, head of rates strategy at Mizuho, adding: "But when the news is confirmed, there is room for a little bit more weakness."

In currency markets, the dollar was moving higher against most currencies ahead of Trump's trade speech.

The pound was lively again too, giving back some of the sharp gains from Monday when the Brexit Party said it would not contest previously Conservative held seats in the upcoming UK election. had shoved sterling to a 6-month high versus the euro and as much as 1% up on the dollar but Tuesday's retreat saw it sag 0.2% to 0.86 per euro and $1.2823. Britain's employers cut more jobs from July to September than in any quarter for four years, data had also shown. /FRX

The dollar's rise .DXY saw the euro droop back to a three-week low of $1.1015 EUR= , the U.S. currency fetched 109.15 yen JPY= , while the New Zealand's dollar NZD= took a tumble after weak inflation expectations data.

Gold, meanwhile, looked to be heading for a third day of declines, touching its lowest since early August at $1,447.89 per ounce XAU= at one point before steadying around $1,450.

U.S. crude CLc1 gained 28 cents to $57.14 a barrel, while Brent crude LCOc1 futures added 35 cents to $62.53.

"The oil market is in a holding pattern," said Tamas Varga of oil broker PVM. "The next $5-$10 move will be decided by economic and trade considerations."

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

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