* Sterling slides as UK PM plans to cut parliamentary time
* Oil prices rise as data show U.S. inventory drawdowns
* Treasury yield curve inversion deepens
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates to close of 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 suspend parliament before the country's
planned departure from the European Union.
The MSCI All-Country World Index .MIWD00000PUS rose 0.31%
as U.S. stocks advanced, though the pan-European STOXX 600
.STOXX ended 0.2% lower. Safe-haven assets such as gold and
the Japanese yen fell, though not far from recent highs.
Data showing a drop 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. U.S. crude CLcv1 settled 1.55% higher to $55.78 per barrel
and Brent LCOcv1 settled at $60.49, up 1.65% on the day.
Along with the oil inventory data, a respite from negative
developments in U.S.-China trade relations helped equities
advance, several market watchers said. Earlier, stocks had been
pressured by concerns about the possibility of economic
disruption from a no-deal Brexit.
"People initially were worried about what was happening
within the UK," said Chris Zaccarelli, chief investment officer
of Independent Advisor Alliance in Charlotte, North Carolina.
"But we've gotten a little bit of a relief rally on positive
fundamentals in the U.S. as people are not worried so much about
what happens with trade."
Worries over Brexit, however, led to a sharp decline in the
British pound GBP= . Sterling was last down 0.59% against the
dollar at $1.2214 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. On Wall Street, the Dow Jones Industrial Average .DJI rose
258.2 points, or 1%, to 26,036.1, the S&P 500 .SPX gained
18.78 points, or 0.65%, to 2,887.94 and the Nasdaq Composite
.IXIC added 29.94 points, or 0.38%, to 7,856.88.
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 30-year yield also fell below the S&P 500
dividend yield for the first time since March 2009. The yield
curve between 2-year and 10-year notes US2US10=TWEB remained
inverted. Benchmark 10-year Treasury notes US10YT=RR last rose 6/32
in price to yield 1.4693%, 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 0.25%. The
Japanese yen weakened 0.40% versus the greenback at 106.18 per
dollar but remained close to its 2-1/2-year high of 104.44 hit
on Monday. Among commodities, spot gold XAU= dropped 0.21% to
$1,539.10 an ounce, though not far off its six-year peak touched
on Monday. Spot silver XAG= added 1.04% to $18.35 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 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>