Global stocks climb with bond yields on trade optimism

Global stocks climb with bond yields on trade optimism

Global stocks climb with bond yields on trade optimism

USA stock futures and Asian shares rose on Monday after the United States dropped its threat to impose tariffs on Mexico in a deal to combat illegal migration from Central America, and as weak U.S.jobs data raised hopes for US interest rate cuts.

Global investors had feared that opening up another trade conflict, while still battling with China, could tip the United States and other economies into recession.

The improved risk sentiment also helped lift the dollar against the yen 0.4pc to 108.64.

S&P500 mini futures rose as much as 0.8% and was last up 0.4%.

The U.S. -Mexico trade and migration deal appeared to give investors a boost after a disappointing U.S.jobs report on Friday, sending U.S. government bond yields higher. "I suspect equity markets are going to react quite positively to the news, and emerging currencies overall are going to do quite well against that backdrop".

"It follows intuitively that positive news on one of the multiple trade war fronts would offset (at least to a small degree) the building economic apprehension which was furthered by Friday's disappointing employment data".

China's exports unexpectedly returned to growth in May despite higher U.S. tariffs, data showed on Monday, but many suspected the rise was due to firms front-loading shipments to avoid higher United States tariffs. "Speculation the Federal Reserve may refrain from raising key interest rate or even may cut is likely to cause bull steepening of Mexico's sovereign curve".

The yuan brushed its lowest since late November after weak import data that reignited worries about slowing Chinese domestic demand. Just three months earlier, wages had been rising at their fastest rate in a decade.

"The only one that could really propel the market higher would be a trade deal with China or if the Fed comes in and surprises everybody by cutting interest rates in June", he said.

Ottawa passes legislation that bans whale and dolphin captivity in Canada
Beluga whales are remarkably social animals, using a massive range of clicks, whistles and clangs to communicate with their kind. The law will contain exceptions for marine mammals who require rehabilitation following an injury, or for scientific research.

The Federal Reserve's next policy meeting is set for next week, on June 18-19.

Gold slipped nearly 1pc, having hit a 14-month high of $1,348.1 per ounce on Friday, near a major resistance around $1,350.

The Mexican peso rose more than 2% to 19.2275 pesos per dollar after trading resumed for the first time following Friday's migration agreement.

In currency trading, the dollar index rose 0.23%, with the euro down 0.15% at $1.1314.

Threats by the USA leader to introduce levies on Mexico sent the peso to a year-to-date low last week.

The offshore yuan was last seen at 6.9502 per dollar, having hit a seven-month low of 6.9619 on Friday. -China trade tensions continued to threaten demand for crude and as major producers Saudi Arabia and Russian Federation had yet to agree on extending an output-cutting deal.

"The yuan would weaken further should there be no summit meetings between the two countries at an upcoming G20 meeting in Osaka", Nomura's Kaku said. Investors are hoping Trump meets his Chinese counterpart at the Group of 20 leaders' meeting later this month to seek a compromise on trade.

Oil prices edged lower on Monday in volatile trading as major producers Saudi Arabia and Russian Federation had yet to agree on extending an output-cutting deal and U.S.

Brent crude futures settled down 1.6 per cent, or US$1.00, at US$62.29 a barrel.

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