* Focus turns to Fed decision
* EU approves Brexit extension to 31 Jan 2020
* Dollar weak on trade optimism, before Fed meeting
* Gold eases; Treasury yields rise
(Updates prices, changes comments, dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Oct 28 (Reuters) - An index of global stock
markets rose to a 21-month high on Monday, boosted by growing
hopes for a U.S.-China trade deal and the view that the U.S.
Federal Reserve this week will deliver its third interest rate
cut for 2019.
U.S. Treasury yields rose after the European Union agreed to
a three-month flexible delay of Britain's departure. Improved
risk sentiment also sapped demand for the safe-haven U.S.
dollar, the Japanese yen and gold.
MSCI's All Country World Index .MIWD00000PUS , which tracks
shares across 47 countries, was up 0.46, its highest intraday
level since Feb. 2, 2018.
U.S. and Chinese officials are "close to finalizing" parts
of a trade agreement after high-level telephone discussions on
Friday, the U.S. Trade Representative's office and China's
Commerce Ministry said. The USTR provided no details on areas of
progress. U.S. President Donald Trump has said he hopes to sign the
deal with China's President Xi Jinping next month at a summit in
Chile.
"Markets seem convinced the first deal will get done and
that negotiations are progressing on the next deal," said Edward
Moya, senior market analyst at Oanda.
Strong results from U.S. companies have boosted risk
sentiment, and investors are hopeful the Fed will cut interest
rates at its meeting this week.
On Wall Street, the S&P 500 hit a record high. Microsoft
Corp MSFT.O boosted all three main indexes, after the tech
giant beat Amazon.com Inc AMZN.O for the Pentagon's $10
billion cloud computing contract. The Dow Jones Industrial Average .DJI rose 149.1 points,
or 0.55%, to 27,107.16, the S&P 500 .SPX gained 17.16 points,
or 0.57%, to 3,039.71 and the Nasdaq Composite .IXIC added
69.35 points, or 0.84%, to 8,312.47.
The pan-European STOXX 600 index .STOXX rose 0.33% to
their highest since January 2018, helped by trade-exposed auto
and mining stocks.
In currency markets, the U.S. dollar slipped as trade deal
optimism reduced demand for safe haven currencies.
"Positive trade headlines continue to support our view that
trade tensions are easing," said Win Thin, global head of FX
strategy at Brown Brothers Harriman.
The dollar index .DXY , which measures the greenback
against a basket of six major currencies was 0.06% lower on the
Sterling GBP= was little changed after the European Union
granted Britain a three-month extension to exit the bloc.
Expectations of a delay were already priced in. The benchmark 10-year U.S. Treasury yield US10YT=RR was
last up 5.7 basis points to 1.858%, the biggest move across
maturities. Oil prices were little changed as trade hopes supported
prices but weak Chinese industrial data weighed.
Brent crude LCOc1 was 0.2 cents lower, or 0.32%, at $61.82
a barrel. West Texas Intermediate (WTI) crude CLc1 fell 0.51
cents, or 0.9% to $56.15 a barrel.
Gold eased as trade hopes limited gains after the precious
metal jumped 1% in the previous session. Spot gold XAU= was
down 0.8% at $1,492.2343 per ounce.
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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