* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, Sept 9 (Reuters) - Stocks gained on Monday as
investors pinned their hopes on expected stimulus from the
world's central banks to support slowing growth, while the pound
hit a six-week high on hopes that Britain will not quit the EU
without a deal.
MSCI's All Country World Index .MIWD00000PUS , which tracks
shares across 47 countries, was up 0.06%.
British Prime Minister Boris Johnson will try for a second
time on Monday to call a snap parliamentary election, but is set
to be thwarted once more by opposition lawmakers who want to
ensure he cannot take Britain out of the European Union without
a divorce agreement in place. Sterling hit a six-week high of $1.2385 GBP=D3 as
investors saw the threat of a "no-deal" Brexit easing. GBP/
In a note published late on Friday, strategists at Goldman
Sachs raised the probability of a Brexit deal to 55% from 45%
and cut the likelihood of a "no deal" to 20% from 25%
previously. "The threat of a no-deal Brexit has somewhat receded but has
not gone away completely, which is reflected around current
levels," said Esther Maria Reichelt, a strategist at
Commerzbank (DE:CBKG).
European stock markets pared early gains, with the
pan-European STOXX 600 index flat by midday in London. Earlier
up on the day, the index eased as the pound's strength weighed
on internationally exposed British stocks. .EU
Germany's trade-sensitive DAX index .GDAXI rose 0.3% after
data showed that seasonally adjusted exports rose 0.7% in July.
A Reuters poll of economists had pointed to a drop of 0.5%.
The data was a positive surprise in largely gloomy readouts
from major economies since Friday, which heightened expectations
of stimulus from central banks.
On Friday, U.S. jobs growth slowed more than expected in
August while data over the weekend from China
showed the country's exports unexpectedly shrank as shipments to
the U.S. slowed The two countries have been locked in a trade dispute since
early 2018, and investors fear escalating tariffs between them -
already curtailing growth - might tip the global economy into
recession as early as next year.
"If all the currently proposed tariffs are implemented, we
foresee that growth in the first half of next year will slow
toward the brink of a recession," said Mark Haefele, chief
investment officer at UBS Global Wealth Management.
But the prospect of central bank support kept risk sentiment
buoyant. MSCI's broadest index of Asia-Pacific shares outside
Japan .MIAPJ0000PUS rose 0.2% and E-mini futures for the S&P
500 index ESc1 were up 0.25%.
On Friday, China's central bank cut reserve requirements for
a seventh time since early 2018 to free funds for lending
Federal Reserve Board Chairman Jerome Powell said the U.S.
central bank would continue to "act as appropriate" to sustain
U.S. economic expansion while the European Central
Bank is expected to cut rates this week The euro fell to a five-day low before recovering ground to
trade 0.1% higher at $1.1032. EUR=EBS
The dollar was 0.05% lower against a basket of currencies.
.DXY It traded at 106.995 yen JPY= , off the one-month peak
of 107.235 scaled late last week.
In fixed income, longer-dated euro zone government bond
yields ticked higher, with most yields up 3 to 4 basis points in
early trade. DE30YT=RR FR30YT=RR NL30YT=RR IT50YT=RR .
Oil rose on expectations that Saudi Arabia, the world's
largest oil exporter, will continue to support output cuts by
OPEC and other producers to prop up prices under new Energy
Minister Prince Abdulaziz bin Salman. O/R