* U.S. futures point to a firmer open
* China's yuan on track for worst month since 1994
* U.S., China to have face-to-face trade talk in Sept
* Dollar index climbs to one month high
* Gold, silver off recent highs
* FACTBOX-Month of bond market milestones: By Karin Strohecker
LONDON, Aug 30 (Reuters) - World stocks rose to a one-week
high on cautious hopes for a rapprochement on trade between
Beijing and Washington on Friday, though a perky dollar capped
gains with China's yuan softening again, on track for its
weakest month in 2-1/2 decades.
For most of August global stocks have reeled and fixed
income shone as deepening concerns over global trade and clear
signs of a slowdown, possibly even a recession, in the global
economy loomed large over financial markets.
But the mood lifted after U.S. President Donald Trump said
some trade discussions were taking place with China on Thursday,
with more talks scheduled. China's commerce ministry
also said a September round of meetings was being discussed by
the two sides, but added it was important for Washington to
cancel a tariff increase.
The MSCI All-Country World Index .MIWD00000PUS climbed
0.3% but is on track for a near 3% decline in August - only the
second month the benchmark has spent in the red this year. It is
the weakest August for the index since 2015.
European stocks on Friday extended the previous session's
gains, with the pan-European STOXX 600 index .STOXX up 0.3% to
trade at a fresh one-month high.
"The trade war seesaw has certainly moved back in favour of
riskier assets for now, with Trump and China supposedly holding
a call yesterday," said Deutsche Bank (DE:DBKGn) strategist Jim Reid.
Gains were helped by a surge in German real estate firms
which saw the country's DAX index .GDAXI add 0.7%. .EU
The picture was more mixed in Asia, where Chinese and Hong
Kong stock markets dipped in and out of the red .HIS .CSI300
.SSEC . Arrests or detentions of pro-democracy activists in
Hong Kong added to investor jitters, with the Chinese-ruled
territory facing its first recession in a decade.
Japan's Nikkei .N225 added 1.2%, while South Korea's KOSPI
.KS11 jumped 1.8%. U.S. futures pointed to a firmer start to the day's trade,
with E-Minis for the S&P500 ESc1 up 0.3% after more than 1%
gain on Wall Street overnight. .N
Fixed income markets took a breather on Friday, at the end
of a stellar month that has seen prices rally and borrowing
costs push deeper and deeper into negative territory.
U.S. Treasury yields nudged higher overnight, with the
benchmark 10-year Treasury US10YT=RR climbing to 1.5349% from
a three-year low of 1.443% touched earlier this week.
It was still below two-year yields US2YT=RR at 1.5419%.
Such an inversion was last seen in 2007 and correctly foretold
the great recession that followed a year later.
Euro zone government bond yields were steady near record
lows as data showed the bloc's inflation remained low at 1.0% in
August, well below the European Central Bank's target and
bolstering expectations for European Central Bank stimulus in
September. Germany is considering lowering its corporate tax rate,
while the U.S. government is thinking about issuing 50- and
100-year bonds in a bid to steepen the yield curve.
Recent economic data has also pointed to a global growth
slowdown with business investment, manufacturing activity and
exports all going south across major economies.
Investors were focused on a string of economic releases due
over the weekend including China's official manufacturing
survey, which would provide a good gauge of the real impact from
the Sino-U.S. trade war.
GLUM YUAN
In currency markets, the dollar .DXY nudged to a one month
high of 98.609 against a basket of six major currencies.
Yet the trade optimism failed to inspire China's yuan, which
resumed its decline with spot yuan CNY=CFXS at 7.1462 against
the dollar. The currency is on track for its weakest month since
Beijing's currency reform in 1994 after it broke through the key
7 to the dollar level earlier in August.
"The yuan move back to 7 and beyond has been a distinct
possibility for months. It is clearly down due to the tariffs,"
said Neil Mellor, senior FX strategist at BNY Mellon in London.
"It does help them to some extent to absorb the tariff costs
- it is one of the few options they have. The fiscal option is
limited after years of excess, and the monetary stimulus has
already been unprecedented this year."
The Australian dollar AUD= , often seen as a proxy bet on
the Chinese economy, slipped towards a 10-year trough.
Elsewhere, the euro plunged to a one-month low against the
dollar, as investors looked for aggressive easing by the
European Central Bank and ignored doubts by some policymakers
about the need for more stimulus.
The Japanese yen stood at 106.40 to the dollar, while the
euro EUR= was 0.2% down at $1.10395.
Sterling GBP= was steady at $1.2182 against the dollar
GBP=D3 ahead of a crucial few days for parliament next week
which could even result in a no-confidence motion and a new
election. FRX/
In commodities, spot gold XAU= came off recent highs to
trade at $1,526 an ounce. Silver was at $18.37 an ounce after
hitting its highest level in more than two years. U.S. crude CLc1 slipped 57 cents to $56.14 a barrel while
Brent fell 30 cents to $60.78 a barrel.
stocks in Aug https://tmsnrt.rs/2ztDVlL
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