Stocks Rally on Trade-Talk Optimism; Pound Surges: Markets Wrap




 

(Bloomberg) -- Stocks rallied on Friday amid growing hopes that the U.S. and China can negotiate a trade truce as high-level talks progress into a second day. Treasuries fluctuated after Thursday's slump while the pound surged on optimism for a Brexit deal.

U.S. equity-index futures also jumped as President Donald Trump said the first senior-level in-person talks since late July are going "really well" and will continue on Friday. The Stoxx Europe 600 Index advanced a third day, with tech firms and banks pacing gains. Equities rallied throughout Asia, with shares in Hong Kong getting an extra lift as protesters discussed scaling back vandalism ahead of planned protests this weekend.

Crude oil rose after a reported explosion on an Iranian tanker reignited fears that unrest in the Middle East could threaten global supply. Gilts slid and the pound strengthened to a three-month high as European Council President Donald Tusk said he received "promising signals" that a Brexit deal is possible.

Investors appear to be growing more optimistic after trade headlines roiled markets this week, with both China and the U.S. having signaled progress in securing a partial deal for a temporary truce on tariffs. Trump said he will meet with China's lead negotiator Vice Premier Liu He on Friday. Reports of a potential breakthrough on Brexit have also gone some way toward removing a persistent source of worry for markets.

"It is good news if we do have a deal -- it avoids the worst," Thanos Vamvakidis, head of global G-10 foreign exchange strategy at Bank of America Merrill Lynch, told Bloomberg TV, speaking about the trade negotiations. "But we are not out of the woods yet."

Here are the main moves in markets:

Stocks

Futures on the S&P 500 Index rose 1% as of 7:21 a.m. New York time.The Stoxx Europe 600 Index surged 1.4%.The Shanghai Composite Index jumped 0.9%.The MSCI Emerging Market Index jumped 1.1%.

Currencies

The Bloomberg Dollar Spot Index fell 0.3%.The euro gained 0.4% to $1.105.The British pound jumped 1.6% to $1.2639.The onshore yuan climbed 0.2% to 7.098 per dollar.The Japanese yen dipped 0.3% to 108.33 per dollar.

Bonds

The yield on 10-year Treasuries gained two basis points to 1.69%.The yield on two-year Treasuries rose three basis points to 1.57%.Germany's 10-year yield climbed one basis point to -0.46%.Britain's 10-year yield jumped eight basis points to 0.666%.Japan's 10-year yield rose two basis points to -0.179%.

Commodities

West Texas Intermediate crude rose 1.3% to $54.25 a barrel.Iron ore dipped 0.7% to $88.20 per metric ton.Gold was little changed at $1,493.68 an ounce.

--With assistance from Sybilla Gross and Adam Haigh.

To contact the reporter on this story: Yakob Peterseil in London at ypeterseil@bloomberg.net

To contact the editor responsible for this story: Samuel Potter at spotter33@bloomberg.net

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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