Gold prices fall as geopolitical tensions ease; U.S. CPI looms
(Adds U.S. market open, byline, dateline; previous LONDON)
* Pound surges as Conservative Party scores solid majority
* European shares rise on Brexit, pound can't hold back FTSE
* World shares at record high on Sino-U.S. deal reports
By Herbert Lash
NEW YORK, Dec 13 (Reuters) - Equity markets globally rose
and oil prices surged on Friday after China and the United
States agreed on a "phase one" trade deal and U.S. President
Donald Trump said Washington would suspend tariffs on Chinese
imports scheduled for Sunday.
Trump tweeted that China agreed to many structural changes
and massive purchases of agricultural, energy and manufactured
products, while the U.S. will cancel some tariffs on a phased
basis, China's vice commerce minister, Wang Shouwen, said in
Beijing. Sterling gained on a resounding victory by British Prime
Minister Boris Johnson and his Brexit-backing Conservative Party
after elections on Thursday ended three years of uncertainty
since Britons voted to leave the European Union. Johnson won a commanding majority in Britain's Parliament,
giving him the power to deliver Brexit, though trade talks with
the EU are set to drag on for months, if not years. UK shares exposed to Britain's economy surged, with the
benchmark FTSE 100 .FTSE index gaining more than 2% at one
point as a rally in utilities, retailers, housebuilders and
banking stocks offset the drag from a jump in sterling.
The pound GBP= rose to 19-month high against the U.S.
dollar and shares in Europe rose to near all-time highs as
investors cheered the likelihood of an orderly Brexit after
Johnson's landslide victory.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.32%, while the pan-European STOXX 600 index .STOXX
rose 1.25%.
Both MSCI's gauge of global stock performance and the three
main U.S. equity indices hit record highs.
But stocks on Wall Street pared initial gains on news of a
preliminary accord on a U.S.-Sino deal. Given the contentious
nature of the 17-month trade war, investors were slow to fully
embrace the news, as both sides have engaged in brinkmanship.
The back and forth between China and the United States is
emblematic of a great power struggle, said James Clunie, manager
of the Jupiter Absolute Return Fund.
"If there are two great countries locked in a strategic war,
which is what a great power struggle is, then that is not going
away, that is probably with us for a long time," Clunie said.
The Dow Jones Industrial Average .DJI fell 101.47 points,
or 0.36%, to 28,030.58. The S&P 500 .SPX lost 11.88 points, or
0.37%, to 3,156.69 and the Nasdaq Composite .IXIC dropped
18.12 points, or 0.21%, to 8,699.20.
Earlier in Asia, Japan's Nikkei .N225 climbed 2.5% to a
14-month high and Shanghai blue chips .CSI300 advanced 2%.
Oil rose to its highest in nearly three months as investors
cheered progress in resolving the U.S.-China trade dispute and
the decisive general election result in Britain.
Brent LCOc1 crude, the global benchmark, rose 47 cents to
$64.67 a barrel. U.S. West Texas Intermediate (WTI) CLc1 was
up 41 cents to $59.59.
During the session, both contracts jumped to their highest
since Sept. 17, with WTI topping $60 a barrel.
Gold prices were little changed as risk appetite got a boost
from progress in the U.S.-China trade talks, though investors
remained cautious.
The dollar fell against a basket of currencies as the
prospect of a China-U.S. trade deal and the Conservative Party
election victory in Britain sapped safe-haven demand for the
greenback.
The dollar index .DXY fell 0.23%, with the euro EUR=
down 0.06% to $1.1121.
The Japanese yen JPM= strengthened 0.07% versus the
greenback at 109.25 per dollar. Sterling GBP= last traded at
$1.3328, up 1.26%.
U.S. benchmark 10-year Treasury notes US10YT=RR rose 23/32
in price to yield 1.8208%,
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Gains for UK assets after Brexit election interactive https://tmsnrt.rs/34i1Kdh
Gains for UK assets after Brexit election png https://tmsnrt.rs/34nttt6
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