Barclays: Retail buyers likely drove the latest leg of the rally
* Focus turns to Fed decision
* EU approves Brexit extension to 31 Jan 2020
* Dollar weak on trade optimism, before Fed meeting
* Gold eases; Treasury yields rise
(New throughout, updates to U.S. afternoon trading)
By Saqib Iqbal Ahmed
NEW YORK, Oct 28 (Reuters) - An index of global stock
markets climbed to a 21-month high on Monday, boosted by growing
hopes for a U.S.-China trade deal and the view that the U.S.
Federal Reserve this week will deliver its third interest rate
cut for 2019.
U.S. Treasury yields rose after the European Union agreed to
a three-month flexible delay of Britain's departure. Improved
risk sentiment also sapped demand for the safe-haven U.S.
dollar, the Japanese yen and gold.
MSCI's All Country World Index .MIWD00000PUS , which tracks
shares across 47 countries, was up 0.48% to its highest intraday
level since Feb. 2, 2018.
U.S. and Chinese officials are "close to finalizing" parts
of a trade agreement after high-level telephone discussions on
Friday, the U.S. Trade Representative's office and China's
Commerce Ministry said. The USTR provided no details on areas of
progress. U.S. President Donald Trump has said he hopes to sign the
deal with China's President Xi Jinping next month at a summit in
Chile.
"Most of the things that have been worrying markets haven't
necessarily been resolved but the concern about them has waned a
little bit," said Randy Frederick, vice president of trading and
derivatives for Charles Schwab in Austin.
Strong results from U.S. companies have boosted risk
sentiment, and investors are hopeful the Fed will cut interest
rates at its meeting this week.
On Wall Street, the S&P 500 hit a record high. Microsoft
Corp MSFT.O shares boosted all three main indexes, after the
tech giant beat Amazon.com Inc AMZN.O for the Pentagon's $10
billion cloud computing contract. The Dow Jones Industrial Average .DJI rose 137.5 points,
or 0.51%, to 27,095.56, the S&P 500 .SPX gained 18.24 points,
or 0.60%, to 3,040.79 and the Nasdaq Composite .IXIC added
85.78 points, or 1.04%, to 8,328.90.
The pan-European STOXX 600 index .STOXX rose 0.25% to
close at its highest since January 2018, helped by trade-exposed
auto and mining stocks.
In currency markets, the U.S. dollar slipped as trade deal
optimism reduced demand for safe haven currencies.
"Positive trade headlines continue to support our view that
trade tensions are easing," said Win Thin, global head of FX
strategy at Brown Brothers Harriman.
The dollar index .DXY , which measures the greenback
against a basket of six major currencies was 0.07% lower on the
Sterling GBP= rose 0.27% after the European Union granted
Britain a three-month extension to exit the bloc. Expectations
of a delay were largely priced in. The benchmark 10-year U.S. Treasury yield US10YT=RR was
last up 5 basis points to 1.851%. Oil prices eased after four days of gains as worries about
weak Chinese industrial data offset hopes oil demand will rise
on a Sino-American trade deal. Brent crude LCOc1 settled down 45 cents, or 0.7% at $61.57
a barrel, while U.S. West Texas Intermediate crude CLc1
settled 85 cents, or 1.5%, lower at $55.81.
Gold eased as trade hopes limited gains after the precious
metal jumped 1% in the previous session. Spot gold XAU= was
down 0.92% at $1,490.51 per ounce.
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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