Stocks buoyed by trade hopes, set for best weekly winning streak in half a year
By Ritvik Carvalho | Fri, January 18, 2019 05:38 EST
LONDON (Reuters) - Global stocks jumped to their highest in more than a month on Friday after a report suggested progress toward resolving the trade dispute between the United States and China.
E-mini futures for the S&P 500 index were up about 0.2 percent and Dow futures were up about 0.3 percent, indicating a higher open on Wall Street.
European stocks surged to their highest since early December, with the pan-European STOXX 600 <.STOXX> index up over 1 percent by afternoon trade in London.
Trade-exposed indexes and stocks gained the most, with autos <.SXAP> rising nearly 2 percent and Germany's exporter-heavy DAX <.GDAXI> up 1.5 percent.
The gains followed the lead of stocks in Asia overnight, which in turn took their cue from Wall Street's performance on Thursday.
The Wall Street Journal reported on Thursday that U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30.
U.S. stocks rallied on the report but pared some of the gains after the Treasury denied Mnuchin had made any such recommendation. The Journal also reported that U.S. Trade Representative Robert Lighthizer resisted Mnuchin's idea.
"Even though the Treasury quickly denied the report, markets didn't retrace much, which implies that traders believe the news are credible – or at least that the overall negotiating process is moving in the right direction," said Marios Hadjikyriacos, investment analyst at online broker XM.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> added 0.75 percent. The index has gained 1.5 percent this week. The Shanghai Composite Index <.SSEC> was up 1.4 percent.
Australian stocks <.AXJO> rose half a percent, South Korea's KOSPI <.KS11> advanced 0.8 percent and Japan's Nikkei <.N225> gained more than 1 percent to a one-month high.
The gains across regions helped lift the MSCI All-Country World Index to its highest in more than a month <.MIWD00000PUS>. The index, which tracks stocks across 47 countries, was set for its fourth straight weekly gain, its longest weekly winning streak in six months. It was last up almost half a percent.
Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the latest round of trade talks aimed at resolving the dispute between the world's two largest economies.
Indicators released recently showed signs that the Chinese economy is losing momentum.
A report due on Monday is expected to show China's fourth-quarter economic growth slowed to its weakest since the global financial crisis, according to a Reuters poll, as demand faltered at home and abroad.
Against a basket of currencies, the dollar was set for its first weekly rise in five, though it was flat on the day.
The euro rose 0.1 percent to $1.14040
The 10-year Treasury yield
The pound was 0.4 percent lower at $1.2932
British retail sales fell for the first time since March during the three months to December, confirming a slowdown in consumer spending as Brexit draws near.
Prime Minister Theresa May survived a vote of confidence this week, removing some political uncertainty for now. The longer-term prospects for Britain and its markets remained far from clear, though.
U.S. crude oil futures
Elsewhere in commodities, palladium
Demand has recently outstripped supply for the metal, used in emissions-reducing catalytic converters for cars. Palladium also appeared to get a boost from hopes for further government stimulus in China, the world's biggest auto market.
(Reporting by Ritvik Carvalho, additional reporting by Shinichi Saoshiro in Tokyo; editing by Larry King and Raissa Kasolowsky)
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