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Stocks across Europe and Asia advanced and U.S. futures rose after news emerged of a tentative deal among American lawmakers to avert another government shutdown. Treasury yields climbed.
Carmakers led the advance in the Stoxx Europe 600 Index, while contracts on the Dow, Nasdaq and S&P 500 all pointed to a firmer open. The dollar held on to Thursday's gains after U.S. lawmakers said they reached an "agreement in principle" on border security funding that would avert a second government shutdown. The Trump administration said the president still wants to meet China's Xi Jinping in an effort to end the trade war.
In Japan, the country's 10-year bond yields remained in negative territory even after the central bank cut purchases of some longer-dated bonds for the first time since July in a regular operation. The institution has sought to taper its purchases while focusing on yield targets rather than quantitative easing. Nissan reported worse-than-expected results.
The prospect of a deal to keep the U.S. government open together with hints that President Donald Trump may reach an accord with China appear to be rekindling the rally in riskier assets after a turbo-charged start to the year showed signs of ebbing last week. A dovish shift by the world's central banks has also helped, but at the same time has underscored the dilemma facing investors -- join the chase for late-cycle gains, or gird themselves for a looming slowdown in growth.
"The trade talks are key," Jason Vaillancourt, Putnam Investments global asset allocation co-head, said on Bloomberg TV. "If we can get a little bit of those growth engines starting to level out around the world, whether it be Japan or Europe, and just bottom out, then I think that will go a long ways to putting a base under risky assets."
Elsewhere, Brent crude rose after its lowest close in more than a week. Turkey's main stock market was poised to enter a bull market. Emerging markets shares climbed and their currencies edged higher. The pound held steady as U.K. Prime Minister Theresa May prepared to update lawmakers on the progress - or lack thereof - of Brexit talks with the EU. The offshore yuan strengthened for the first time in five days.
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--With assistance from Todd White and Andreea Papuc.
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