Global shares rose on Friday amid optimism over trade talks between the United States and China
Global shares rose on Friday amid optimism over trade talks between the United States and China and were headed for their best quarterly performance since 2012, while bond yields rose after worries about growth led to a prolonged decline.
The pan-European STOXX 600 index rose half a percent. France’s CAC 40 index gained 0.84 percent, Germany’s DAX rose 0.84 percent [.EU] and Britain’s FTSE 100 index was up 0.3 percent.
Their gains came after Asia’s strong advance. Chinese shares rose more than 3.1 percent after U.S. officials said China had made proposals in trade talks that went further than it had before.
U.S. Treasury Secretary Steven Mnuchin said on Friday he had a “productive working dinner” the previous night in Beijing, before talks aimed at resolving the trade dispute between the world’s two largest economies.
Our base case is for the current tariff truce extension to yield only a partial resolution, including select U.S. tariff rollbacks in exchange for some Chinese concessions on imports, market access and intellectual property, strategists at UBS wrote in a note to clients.
Gains on Wall Street overnight also bolstered investor optimism. S&P 500 E-mini futures were up by 0.36 percent. Despite recent turbulence, the S&P 500 has gained 12.3 percent this quarter, its best quarterly performance since 2009 if sustained.
MSCI’s All-Country World Index, which tracks shares in 47 countries, was up 0.25 percent on the day. It was set to post its best quarterly performance since March 2012.
German and French government bond yields were poised for their biggest monthly falls since June 2016. Heightened anxiety about global growth had sparked a flood into fixed income globally.
Ten-year bond yields across the euro zone were higher in early trade, reflecting the gains by stocks. [GVD/EUR]
Wouter Sturkenboom, chief investment strategist for EMEA at Northern Trust, said he expected bond markets to stabilise from here.
The growth outlook for the euro zone is not as bad as markets are anticipating and we think the Bund yield also reflects some safe-haven element, he said.
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