* Sterling slides as UK PM plans to cut parliamentary time
* Oil prices rise as data show U.S. inventory drawdowns
* Treasury demand robust in auction of 5-year notes
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates to mid-afternoon in U.S. markets)
By April Joyner
NEW YORK, Aug 28 (Reuters) - A gauge of equities worldwide
rose on Wednesday as data showing strong demand for oil helped
subdue recession jitters, while sterling tumbled as Britain's
prime minister moved to restrict parliamentary time before the
country's planned departure from the European Union.
The MSCI All-Country World Index .MIWD00000PUS rose 0.24%
as U.S. stocks advanced, though the pan-European STOXX 600
.STOXX ended 0.20% lower. As stocks recovered from early
losses, safe-haven assets such as gold and the Japanese yen
turned negative on the day, though still near recent highs. U.S.
Treasury prices also eased. Data showing a fall in U.S. crude stockpiles lifted oil
prices. The sign of healthy demand quelled to some extent the
fears of a severe economic downturn prompted by the inversion of
the U.S. Treasury yield curve, which has historically been a
highly accurate predictor of a U.S. recession. "To have de-stocking occur that quickly is viewed as a
positive sign for the economy," said Michael O'Rourke, chief
market strategist at JonesTrading in Greenwich, Connecticut,
referring to the data on oil inventories. "It's a good enough
reason for stocks to bounce today."
Following the data, U.S. crude CLcv1 rose 1.38% to $55.69
per barrel and Brent LCOcv1 was last at $60.40, up 1.5%.
The British pound GBP= dropped sharply after Prime
Minister Boris Johnson set Oct. 14 as the date for the formal
state opening of a new session of parliament. The opening limits
the time the parliament would sit before the planned date for
Brexit on Oct. 31. The news stoked fears of an economically
disruptive no-deal departure from the EU. Sterling was last down 0.50% against the dollar at $1.2226.
On Wall Street, the Dow Jones Industrial Average .DJI rose
210.36 points, or 0.82%, to 25,988.26, the S&P 500 .SPX gained
15.2 points, or 0.53%, to 2,884.36 and the Nasdaq Composite
.IXIC added 18.78 points, or 0.24%, to 7,845.73.
Despite the bounce in equities, demand for Treasuries
remained robust during a $41 billion auction of five-year
government debt on Wednesday. Yields on 30-year U.S. Treasuries
US30YT=RR touched all-time lows earlier in the session and
were below those of 3-month bills US3MT=RR . The yield curve
between 2-year and 10-year notes US2US10=TWEB remained
inverted. Benchmark 10-year Treasury notes US10YT=RR last rose 9/32
in price to yield 1.4593%, from 1.49% late on Tuesday.
"It's become very difficult for investors to garner an idea
of where we go to next," said Michael Hewson, chief market
strategist at CMC Markets. "The weakness in bond yields and the
strength in havens speaks to an investor that is becoming
increasingly risk-averse."
In currencies, the dollar index .DXY rose 0.17%. The
Japanese yen weakened 0.23% versus the greenback at 106.00 per
dollar. Among commodities, spot gold XAU= dropped 0.03% to $1,542
an ounce, though not far off its six-year peak touched on
Monday. Spot silver XAG= added 1.16% to $18.37 an ounce after
having hit $18.50, its highest level since April 2017.
U.S. Yield Curve http://tmsnrt.rs/2zUqXiW
World FX rates in 2019 http://tmsnrt.rs/2egbfVh
GBP moves https://tmsnrt.rs/2PlDRiw
EXPLAINER-Countdown to recession: What an inverted yield curve
means ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>