* U.S., China trade negotiators agree to cooperate on trade
deal
* European stock futures point higher
* MSCI Asia Ex-Japan adds 1.19%, S&P 500 e-minis up 1.14%
* Oil jumps on hopes for improving demand
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith and David Henry
SHANGHAI/NEW YORK, May 8 (Reuters) - Asian shares rose on
Friday as a phone call between U.S. and Chinese officials raised
hopes that trade tensions were easing,
turning the focus away from looming data expected to show the
American economy lost the most jobs since the Great Depression.
European equities were set to maintain the good cheer, with
pan-region Euro Stoxx 50 futures STXEc1 up 0.94% at 2,888
points, German DAX futures FDXc1 up 1.28% at 10,883 and
France's CAC 40 futures FCEc1 0.81% higher at 4,529.5.
Asian markets, which had opened higher following gains on
Wall Street overnight, got a further boost on news that U.S. and
Chinese trade representatives had held a phone call and pledged
to improve the atmosphere for the implementation of the two
countries' Phase 1 trade deal. The discussion comes amid escalating tension between the
countries, exacerbated by a war of words over U.S. criticism of
China's handling of the novel coronavirus outbreak.
The news lifted U.S. stock futures, pushing E-minis for the
S&P 500 ESc1 up 1.14% to 2,912.75.
MSCI's broadest gauge of Asian share indexes outside Japan
.MIAPJ0000PUS was 1.19% higher and Japan's Nikkei .N225
gained 2.56%.
Australian shares .AXJO added 0.5% on the day, and Chinese
blue-chips .CSI300 were 1.06% higher.
While rising equity markets on Friday were accompanied by a
slight uptick in U.S. Treasury yields, bond markets remained
focused on the shaky global economic picture as
coronavirus-related lockdowns continue to depress economic
activity, despite signs of reopening in more countries.
"The equity market is disconnected and optimistic ... We've
got this bizarre scenario at the moment, where the bond market
is really looking at the doomsday economic data and also hopes
for potentially further support from the U.S. Federal Reserve,"
said Ryan Felsman, senior economist at CommSec in Sydney.
Data from Japan on Friday showed household spending plunging
6% on year in March, and service-sector activity shrinking at a
record pace in April. Wall Street indexes climbed on Thursday, with the Nasdaq
erasing losses for 2020, following a clutch of upbeat earnings.
PayPal Holdings PYPL.O soared 14%. After hitting a record low of 0.129% on Thursday, the yield
on U.S. two-year Treasuries US2YT=RR ticked up to 0.1369%,
while the benchmark 10-year note US10YT=RR edged back up to
0.6339% from the previous day's close of 0.631%.
The yield on the 30-year bond US30YT=RR was barely changed
at 1.3219% from a close of 1.321% Thursday.
Bond markets were jolted this week, and the U.S. yield curve
steepened after the U.S. Treasury Department said it would
introduce a long-planned 20-year bond and expected to borrow
$2.999 trillion in the second quarter.
But yields fell from three-week highs on Thursday as
investors digested the prospect of a surge in debt supply and as
some saw a dim outlook for the economy as it emerges from virus
lockdowns.
Federal funds futures 0#FF: had showed expectations of
negative U.S. interest rates for the first time on Thursday,
even as Federal Reserve officials have said such a development
would be bad for the economy.
Looming over the markets is a report on Friday that is
expected to show that the U.S. economy likely lost a staggering
22 million jobs in April and the unemployment rate jumped to 16%
as people stayed home to thwart the spread of the novel
coronavirus. Markets had a foretaste on Thursday with weekly claims for
unemployment benefits that added up to some 33.5 million people
over the past few weeks, roughly one of every five American
workers.
In currency trading, the dollar index =USD fell 0.08% to
99.737 after hitting a two-week high on Thursday as some
investors took profits ahead of the jobs report. The euro EUR= rose 0.07% to buy $1.0840, and the dollar
added 0.08% to buy 106.35 yen JPY= .
Hopes for improving demand lifted oil prices. Brent LCOc1
futures added 3.05% to $30.36 a barrel, while U.S. crude CLc1
added 4.93% to $24.71.
After rising more than 2% on Thursday in anticipation of
weak U.S. jobs data, spot gold XAU= was little changed at
$1,717.80 an ounce.
(Editing by Simon Cameron-Moore and Kim Coghill)