* Pound rallies further on Brexit bets
* U.S.-China negotiations going well - Trump
* Oil jumps after explosion on Iranian oil tanker
(Updates prices, adds end of U.S.-China talks)
By Rodrigo Campos
NEW YORK, Oct 11 (Reuters) - Global stocks and the euro
rallied on Friday on signs of progress in U.S.-China trade talks
and hopes that Britain was moving closer to a smooth exit from
the European Union.
The MSCI world equity index .MIWD00000PUS was on track for
its first weekly rise in four. Frankfurt's main stock index
.GDAXI , seen as sensitive to trade wars because of its
export-oriented components, ended up 2.9% for its biggest daily
gain since January 4.
The improved appetite for riskier assets carried from
Thursday and improved after U.S. President Donald Trump said
"good things" were happening during high-level China-U.S. trade
talks and spoke of "warmer feelings." U.S. officials signaled good news was coming after a second
day of trade talks with China ended, boosting investor hopes
that the world's two largest economies would agree to cool the
fires of their 15-month tariff war. However, investors said they were hoping for, at best, a
deal limited in scope, and noted that rhetoric had in the past
failed to translate into meaningful moves.
"We have been here before, where we have seen positive talk.
It's possible they will be able to do a smaller deal around
tariffs, where there is some room for movement," said Mike Bell,
global market strategist at J.P. Morgan Asset Management.
BOUNCY POUND
Sterling jumped nearly 2% versus the dollar for a second
day, putting it on track for its largest weekly gain in more
than two years after the EU Brexit negotiator reported a
"constructive" meeting with his British counterpart.
Sterling GBP= was last trading at $1.2657, up 1.74%.
Stocks on Wall Street followed Asia and Europe, with the S&P
500 on track for its largest daily gain in at least two months.
"Over the last couple of months, we have seen
(companies)taking a hit from the uncertainty around trade and
markets will be looking for any clues to remove that," said
Scott Brown, chief economist at Raymond James in St. Petersburg,
Florida.
"It is still going to be a one step forward, two steps
backward tone with the (trade) talks, but there are hopes of a
de-escalation."
The Dow Jones Industrial Average .DJI rose 390.17 points,
or 1.47%, to 26,978.38, the S&P 500 .SPX gained 50.51 points,
or 1.72%, to 2,988.64 and the Nasdaq Composite .IXIC added
157.94 points, or 1.99%, to 8,108.73. The pan-European STOXX 600 index .STOXX rose 2.31% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
1.77%. Emerging market stocks rose 1.82%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.81%
higher, while Japan's Nikkei .N225 rose 1.15%. The Federal Reserve said it would begin buying about $60
billion per month in Treasury bills to ensure "ample reserves"
in the banking system, a program that will continue at least
until the second quarter of 2020. The dollar fell toward its session lows after the Fed
announcement. The dollar index .DXY fell 0.38%, with the euro EUR= up
0.31% to $1.1038.
The Japanese yen weakened 0.46% versus the greenback at
108.50 per dollar as its global safe-haven luster faded.
In commodities, oil prices rose after Iranian media said a
state-owned oil tanker had been attacked in the Red Sea near
Saudi Arabia, raising the prospect of supply disruptions, but
bearish oil demand forecasts are seen keeping a lid on gains.
U.S. crude CLc1 rose 2.35% to $54.81 per barrel and Brent
LCOc1 was last at $60.58, up 2.5% on the day.
The Fed announcement triggered a steepening of the U.S.
yield curve, with the spread between 10-year US10YT=RR and
three-month US3MT=RR yields on track to end the session in
positive territory for the first time since May.
Benchmark 10-year notes US10YT=RR last fell 29/32 in price
to yield 1.7552%, from 1.656% late on Thursday.
The 2-year note US2YT=RR last fell 6/32 in price to yield
1.6199%, from 1.53% late on Thursday.
Sterling loses a cent in two minutes before recovering https://tmsnrt.rs/2pdIUow
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
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