* U.S.-China co-operation boosts sentiment
* U.S. jobs data expected to be worst in almost a century
* London stock exchange closed for bank holiday
By Elizabeth Howcroft
LONDON, May 8 (Reuters) - Global shares rallied on Friday as
investors cheered signs of improving Sino-American relations and
looked towards more governments gradually reopening their
economies.
The positive mood stands in sharp contrast to the economic
data. U.S. unemployment numbers due later on Friday are expected
to be the worst in a lifetime as the coronavirus pandemic
ravages economies.
Top U.S. and Chinese trade representatives discussed their
Phase 1 trade deal on Friday, with China saying they agreed to
improve the atmosphere for its implementation and the United
States saying both sides expected obligations to be met.
Asian markets, which had opened higher following gains on
Wall Street, were lifted by news of a phone call between U.S.
and China trade representatives.
This calmed investors' fears about renewed trade tensions
after U.S. President Donald Trump and other top officials blamed
China for the deaths of hundreds of thousands from the new
coronavirus and threatened punitive action, including possible
tariffs and shifting supply chains away from China. "The threat of a breakdown in negotiations for now at least
has been averted, though of course the president continues to
persist with some of his comments regarding the COVID outbreak
but at least from the trade side it looks as though the
participants involved have dialled down the temperature a little
bit," said Jeremy Stretch, head of G10 FX strategy at CIBC
Capital Markets.
Improving sentiment also put European futures comfortably in
the black, with the pan-European Stoxx 600 .STOXX up 0.6% at
339.86 points, Germany's DAX .GDAXI up 0.75% at 10,840 and
France's CAC 40 .FCHI 0.6% higher at 4,526.
U.S. stock futures for the S&P 500 ESc1 were up 0.92% to
2,906.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was half a percent higher, while MSCI's
main European Index .MSER was up 0.64%.
The Euro STOXX 600 .STOXX was 0.6% higher, helped by the
construction and materials sector .SXOP .
Oil prices climbed as countries including Australia moved
ahead with plans to relax economic and social lockdowns put in
place to halt the virus pandemic, kindling market hopes for a
boost in demand for crude and its products. Brent crude LCOc1 was up 77 cents, or 2.6%, at $30.23 a
barrel, while U.S. oil CLc1 gained $1.06, or 4.5%, to $24.61 a
barrel.
Both contracts are heading for a second week of gains after
the lows of April.
Core European bond yields were little changed, and the
spread between German and Italian ten-year government bonds
narrowed by 6 basis points DE10IT10=RR .
HISTORIC HIT
Unemployment data due later in the day is expected to show a
historic hit to the U.S. labour market. Forecasters expect the U.S. economy likely lost a staggering
22 million jobs in April, in what would be the steepest plunge
in payrolls since the Great Depression and the starkest sign yet
of how the virus pandemic is battering the world's top economy.
"The situation on the U.S. labour market is a disaster -
that is no secret," wrote Commerzbank strategist Thu Lan Nguyen
in a note to clients.
"And today everyone's attention is going to focus on the
labour market report for April to find out just how bad the
disaster is."
The dollar slipped against a basket of six major currencies
.DXY in early trading as investors defied the broader sense of
doom. By early European trading, the dollar was edging up again,
suggesting the optimism would not endure.
A public holiday in Britain means liquidity will be thin as
London markets are closed.
Gold hovered near a two-week high hit in the previous
session as investors awaited the U.S. jobs report, with spot
gold XAU= holding just below the highest since April 27.
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