* Next: Powell's Jackson Hole speech on Friday
* Renault (PA:RENA), Fiat tie-up hopes boost shares
* U.S. 2-yr/10-yr curve flattens to under 1 basis point
(Updates with muted reaction to Fed minutes)
By Rodrigo Campos
NEW YORK, Aug 21 (Reuters) - A global equities gauge rose on
Wednesday for a third day in four as bets on more economic
stimulus overcame, for now, worries over the rising prospect of
a global recession.
The flattening of the curve between 2-year and 10-year U.S.
Treasury debt, however, loomed as an inversion is seen as a
harbinger for an economic contraction. US/
Strong earnings in the United States and the report of talks
on a mega merger in European autos triggered gains in stocks,
and the improved risk sentiment drove safe-haven yields higher
while the yen and gold edged lower.
There was muted reaction across markets to minutes from the
late July meeting at the Federal Reserve. Policymakers debated
cutting interest rates more aggressively than the quarter-point
cut last month, while showing broad concern over a global
economic slowdown and trade tensions. The trade war escalated further after that Fed meeting and
investors were cautious about the current validity of their
comments.
"It's really old news. This is from the July meeting and
what (Fed Chairman Jerome) Powell has to say on Friday is going
to be much, much more important than these minutes," said Mary
Ann Hurley, vice president in fixed-income trading at D.A.
Davidson in Seattle.
Traders expect that the Fed's annual Jackson Hole symposium
and a Group of Seven summit this weekend will shed light on the
next steps policymakers will take to support economic growth.
Auto shares .SXAP led European stocks higher after Italian
media suggested the merger talks between Fiat Chrysler and
Renault have continued despite reports to the contrary.
In U.S. equities, earnings from Target (NYSE:TGT) and Lowe's boosted
consumer-centered stocks and overall market sentiment.
The Dow Jones Industrial Average .DJI rose 214.02 points,
or 0.82%, to 26,176.46, the S&P 500 .SPX gained 19.59 points,
or 0.68%, to 2,920.1 and the Nasdaq Composite .IXIC added
57.64 points, or 0.73%, to 8,006.20. The pan-European STOXX 600 index .STOXX rose 1.21% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.59%. Emerging market stocks rose 0.36%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.15%
lower, while Japan's Nikkei .N225 lost 0.28%. RISE, YEN FALLS
Futures markets have fully priced a 25-basis-point cut in
next month's Fed meeting. On Wednesday, U.S. Treasury yields
rose as rising stock prices reflected improving risk sentiment.
Benchmark 10-year notes US10YT=RR last fell 6/32 in price
to yield 1.5791%, from 1.559% late on Tuesday. Germany sold 30-year bonds with a negative yield for the
first time at an auction on Wednesday, a milestone for a
fixed-income market where the entire curve now yields less than
zero. The very weak demand seen at the auction was
expected. West Texas crude futures fell after U.S. government data
showed a drawdown in domestic crude stockpiles but rises in
refined product inventories, while worries about a possible
global recession capped gains in Brent.
U.S. crude CLc1 fell 0.89% to $55.63 per barrel and Brent
LCOc1 was last at $60.22, up 0.32% on the day. In currencies, the dollar rose against the Swiss and
Japanese safe-haven currencies and the dollar index .DXY rose
0.11%, with the euro EUR= down 0.14% to $1.1083. Sterling
GBP= was last trading at $1.2123, down 0.37% on the day.
The Japanese yen weakened 0.35% versus the greenback at
106.61 per dollar.
Spot gold XAU= dropped 0.4% to $1,501.26 an ounce.
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets in 2019 http://tmsnrt.rs/2ihRugV
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>