(Adds oil, gold settlement prices)
* U.S. stocks eke new records, European stocks mixed
* U.S. President Trump faces impeachment vote
* German business sentiment rises in December
By Herbert Lash
NEW YORK, Dec 18 (Reuters) - The dollar gained on Wednesday
as improving economic data squashed the likelihood of a Federal
Reserve interest rate cut in 2020, while global equity markets
extended a rally that again pushed key indices on Wall Street to
record highs.
Gold eased, tugged lower by a firmer dollar that has found
support from mounting expectations the Fed will not cut rates
anytime soon.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.03%, trading modestly higher after declining overnight
in Asia. Emerging market stocks rose 0.55%, with Brazil's
Bovespa index hitting a record high. European shares traded mixed as gains in Swedish truck maker
Volvo and defensive sectors offset worries about a hard Brexit,
which continued to pressure British mid-cap shares. Most regional bourses hovered around lows touched on
Tuesday, when UK Prime Minister Boris Johnson set a hard
deadline of December 2020 to reach a new trade deal over
Britain's exit from the European Union. The pan-European STOXX 600 index .STOXX lost
0.13%. There are jitters regarding the "phase one" U.S.-China trade
deal as it has yet to be signed, said Sebastien Galy, senior
macro strategist at Nordea Asset Management in Luxembourg.
"We are in a wait-and-see mode, momentum has been strong and
should continue into year end," Galy said.
The S&P 500 and Nasdaq clawed to new record highs. Hopes for
a U.S.-China trade deal have propelled the two indices to record
closing levels for four straight sessions. Expectations the Fed will cut rates from the current 1.5% to
1.75% range are a mere 2.2% for the January meeting, 4.3% for
March and 12% for April, according to CME Group's FedWatch tool.
The FedWatch tool shows a 50% chance that rates will remain
at current levels through December 2020.
The dollar index .DXY rose 0.18%, with the euro EUR=
down 0.3% to $1.1115. The Japanese yen JPY= weakened 0.11%
versus the greenback at 109.61 per dollar. U.S. Treasury yields were steady as investors shrugged off
the likely impeachment in the lower house of Congress of U.S.
President Donald Trump on charges of abusing his office and
obstructing a congressional probe.
Separate votes on the two charges are expected in the early
evening. The votes are expected to fall almost entirely along
party lines, with Democrats in favor and Republicans opposed.
The benchmark 10-year U.S. Treasury note US10YT=RR fell
10/32 in price to yield 1.9239%.
Yields on European government debt edged higher as the
market bets negative rates are not here forever with Sweden's
central bank set to move away from negative rates on Thursday,
Galy said. German business morale rose more than expected in December
to a six-month high, the Ifo survey showed on Wednesday,
suggesting that Europe's largest economy picked up steam in the
fourth quarter. The yield on the German 10-year bund DE10YT=RR rose almost
4 basis points to -0.251%.
Oil prices steadied after U.S. government data showed a
decline in crude inventories and on expectations for an uptick
in demand next year on the back of progress in resolving the
U.S.-China trade fight.
Brent futures LCOc1 gained 7 cents to settle at $66.17 a
barrel, while U.S. West Texas Intermediate (WTI) CLc1 settled
down 1 cent at $60.93 a barrel.
U.S. gold futures GCv1 inched down 0.1% to settle at
$1,478.70 an ounce.
GRAPHIC-MSCI's World Stock Index https://tmsnrt.rs/34CG1Nn
GRAPHIC-Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC-World FX rates in 2019 http://tmsnrt.rs/2egbfVh
GRAPHIC-MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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