GLOBAL MARKETS-Stocks shed early losses; sterling tumbles on Brexit jitters

Published 28/08/2019, 16:48
Updated 28/08/2019, 16:51
© Reuters.  GLOBAL MARKETS-Stocks shed early losses; sterling tumbles on Brexit jitters

* Wall Street stocks advance

* Treasury yields pare losses after 30-year yield hits

record low

* Sterling slides as UK PM plans to cut parliamentary time

* Gold, silver, Japanese yen ease from session highs

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Updates to open of U.S. markets, changes byline, dateline;

previous LONDON)

By April Joyner

NEW YORK, Aug 28 (Reuters) - A gauge of equities worldwide

shed early losses on Wednesday as Wall Street stocks rose

despite looming 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 advance in U.S. stocks propelled the MSCI-All Country

World Index .MIWD00000PUS to a 0.26% gain, even though the

pan-European STOXX 600 .STOXX fell 0.14%. As stocks recovered,

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. Still, risk appetite was muted as yields on 30-year U.S.

Treasuries touched all-time lows earlier in the session and were

below those of 3-month bills. The yield curve between 2-year

and 10-year notes US2US10=TWEB remained inverted. An inversion of the yield curve - where yields on

shorter-dated debt are above those on longer-dated paper - has

historically been a highly accurate predictor of a U.S.

recession.

"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."

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 0.45% against the dollar at $1.2232.

The Dow Jones Industrial Average .DJI rose 176.7 points,

or 0.69%, to 25,954.6, the S&P 500 .SPX gained 14.87 points,

or 0.52%, to 2,884.03 and the Nasdaq Composite .IXIC added

23.83 points, or 0.3%, to 7,850.78.

Benchmark 10-year Treasury notes US10YT=RR last rose 7/32

in price to yield 1.4677%, from 1.49% late on Tuesday.

In currencies, the dollar index .DXY rose 0.15%. The

Japanese yen weakened 0.13% versus the greenback at 105.89 per

dollar, but remained close to the 2-1/2-year high of 104.44 it

hit on Monday. Among commodities, spot gold XAU= dropped 0.4% to

$1,536.45 an ounce, though not far off its six-year peak touched

on Monday. Spot silver XAG= added 0.6% to $18.27 an ounce after

having hit $18.50, its highest level since April 2017.

Oil prices jumped as data showing a fall in U.S. crude

stockpiles helped ease worries about weakening oil demand caused

by the China-U.S. trade war. U.S. crude CLcv1 rose 2.15% to

$56.11 per barrel and Brent LCOcv1 was last at $60.61, up

1.85% on the day.

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 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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