Asian stocks see brighter world as trade, UK clouds lift
By Wayne Cole SYDNEY (Reuters) - Asian share markets jumped on Friday as a last-gasp Sino-U.S. trade deal and a likely major election win by Britain's Conservative Party looked to have cleared a couple of dark clouds from the global horizon
By Wayne Cole
SYDNEY (Reuters) - Asian share markets jumped on Friday as a last-gasp Sino-U.S. trade deal and a likely major election win by Britain's Conservative Party looked to have cleared a couple of dark clouds from the global horizon.
The double dose of relief slugged safe-haven sovereign bonds and the Japanese yen, even leading investors to scale back the chance of more interest rates cuts around the world.
"Global investors have been given two of the biggest gifts on their Christmas list and should be appreciative for a while at least," said Sean Callow, a senior forex analyst at Westpac.
"Global equity indices such as MSCI World should set more record highs and sterling could push above $1.36."
The pound hit its highest since mid-2018 as UK exit polls seemed to rule out a shock win by the left-wing Labour opposition, and could help clarify the outlook for Brexit.
Polls suggested Prime Minster Boris Johnson could gain a commanding 368 seats in Britain's Parliament, settling another long-standing uncertainty.
The pound was last up 2.3% at $1.3464
A wave of trade euphoria had already lifted Wall Street to record highs. Reuters reported the United States has agreed to reduce some tariffs on Chinese goods and delay a tranche of tariffs as part of a phase one deal.
China also has agreed to make $50 billion in agricultural purchases in 2020 as part of the deal, that person and another U.S. source familiar with the talks said.
"If the U.S. cuts the current tariffs to some extent as reported, that is not something markets have priced in, so we could see a further leg up in the stock market," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
"The Conservatives appear to be on course for a big win. We are now finally seeing a clear direction on Brexit after three years of deadlock."
LESS NEED FOR MORE CUTS?
In Asia, Japan's Nikkei <.N225> climbed 2.1% to a 14-month high, while South Korean stocks <.KS11> firmed 1.2%. E-Mini futures for the S&P 500
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> put on 0.5%.
Wall Street had celebrated the trade news with record highs. The Dow <.DJI> ended Thursday up 0.79%, while the S&P 500 <.SPX> gained 0.86% and the Nasdaq <.IXIC> 0.73%.
That was bad news for bonds and yields on U.S. 10-year Treasuries
Interest rate futures <0#FF:> slipped as investors priced in less chance of a rate cut from the Federal Reserve next year - a shift seen across a range of developed nations.
Other safe harbours also took a beating, with the yen sliding across the board. The dollar firmed further to 109.42 yen
The dollar fared less well elsewhere as the pound and the euro both benefited from the UK exit polls. The euro added 0.5% to $1.1189
The dollar also lost out to the Chinese yuan to hit an 18-week low as any truce would be seen as a boon for the export-heavy economy. The dollar was last at 6.9487 yuan
The shift from safe havens saw spot gold ease to $1,465.04 per ounce
Oil prices rallied on hopes a trade deal would support global growth and thus demand. [O/R]
(Editing by Lisa Shumaker and Sam Holmes)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.