Stocks, gold gain as trade war spurs both hopes, concerns


NEW YORK (Reuters) – Global equity markets advanced on Monday as stocks on Wall Street held near record highs on hopes U.S.-Sino talks delay a U.S. tariff deadline this coming Sunday, while gold rose as investors hedged against a possible escalation in the trade war.

FILE PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S., November 18, 2019. REUTERS/Brendan McDermid

Crude oil prices fell and the dollar slipped against the safe-haven Swiss franc after data showed Chinese exports in November shrank for the fourth straight month, renewing concerns about damage to global demand caused by the 17-month trade fight.

A Dec. 15 deadline that is set to usher in $156 billion in fresh U.S. tariffs on Chinese exports stirred caution and bolstered the dollar against currencies highly sensitive to the trade war such as the Australian and New Zealand dollars.

A tug was apparent between enthusiasm for stocks during a year in which MSCI’s all-country world index has gained 20% and investors worried about the U.S.-Sino trade spat.

Spot gold XAU= added 0.1% to $1,460.67 an ounce.

Buoyed by Friday’s blockbuster U.S. jobs report, traders and investors held out for a delay in the U.S. tariff deadline, while expecting more positive gestures from both sides.

China hopes it can reach a trade agreement with the United States that satisfies both sides, Assistant Commerce Minister Ren Hongbin told reporters overnight.

“Markets are telling us that there are hopes for something positive to come up before the deadline,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “The two sides might just roll back tariffs or even postpone the date but something will happen,” he said.

MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.03%, while stocks on Wall Street traded little changed and slid in Europe.

The pan-European STOXX 600 index lost 0.24%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 61.19 points, or 0.22%, to 27,953.87. The S&P 500 .SPX lost 1.96 points, or 0.06%, to 3,143.95 and the Nasdaq Composite .IXIC dropped 5.22 points, or 0.06%, to 8,651.31.

U.S. Treasury yields fell after rising three straight days as risk appetite ebbed after the weak Chinese trade data.

Benchmark 10-year notes US10YT=RR rose 6/32 in price to yield 1.8242%.

German exports rose unexpectedly in October, a morale boost for Europe’s largest economy, but it had little impact on the other European bonds.

Yields on Germany’s 10-year bund DE10YT=RR, a benchmark for the euro zone, fell to -0.304%.

Oil prices fell on the Chinese export date.

FILE PHOTO: A man is reflected on an electronic board showing a graph analyzing recent change of Nikkei stock index outside a brokerage in Tokyo, Japan, January 7, 2019. REUTERS/Kim Kyung-Hoon

Brent futures LCOc1 fell 18 cents to $64.21 a barrel. West Texas Intermediate oil futures CLc1 slid 8 cents, or 1.01% to $59.12 a barrel.

The dollar index .DXY fell 0.08%, with the euro EUR= up 0.09% to $1.1067.

The Japanese yen JPY= weakened 0.03% versus the greenback at 108.63 per dollar.

Reporting by Herbert Lash; additional reporting by Shreyashi Sanyal in Bengaluru; Editing by Dan Grebler

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