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© Reuters. The DAX chart of the German stock index at the Frankfurt Stock Exchange
By Dhara Ranasinghe
LONDON (Reuters) – Global equities reached Wednesday their highest level in six months. Investors welcomed the progress of the US-China trade negotiations and rebaduring economic data, helping to reduce the German bond rate to 10 years to zero percent.
Oil has been close to $ 70 a barrel – a record for several months – because of supply problems.
Sterling has extended its gains after British Prime Minister Theresa May announced Tuesday night that she would be asking for another delay on Brexit in order to conclude a divorce agreement between the EU and the Labor Party leader. Opposition, letting hope for a "softer" Brexit.
Signs of progress in US-China trade negotiations and decent data on factory activity in China and the United States in recent days have rebadured investors and eased fears of a global recession.
European stock markets rose by almost 0.8%, reaching their highest level since August, reflecting strong overnight gains in Asia, where the broadest equity market index Asia Pacific (MSCI) out of Japan hit a seven-month high.
Hopes of an agreement to end the trade war between the world's two largest economies have been fueled by recent comments from White House economic adviser, Larry Kudlow, that Washington is expecting to Washington's "doing more" in this week's negotiations.
"We are told that we are 90% of the way there, which is obviously encouraging, but that the remaining 10% – which apparently includes the enforcement mechanism and the removal of tariffs – could little time to degrade, "said Craig Erlam, Senior Market Analyst at Oanda in London.
"Investors are happy to be patient here in the hope that both sides will solve this problem and put an end to a trade war that has clearly wreaked havoc on the markets."
The German stock market rose 1%, reaching its highest level since October, while in Paris, French equities recorded a similar level. The stronger tone of the pound, however, weighed on the London index, which was slightly lower.
The generally strong global equities and hopes of a milder Brexit have caused a mbadive selloff of safe-haven state bonds, propelling returns far from the recent lows.
increased by almost 4 basis points to 2.52%.
The yield on the 10-year German Bund reached 0.005%. A week ago, worries about weak economic growth reached their lowest level in two and a half years at around minus 0.09%.
"What we're seeing is that the markets have been climbing around the world but that progress has been made in trade, a recession is unlikely, central banks have turned to a more accommodating policy, "said Chris Bailey, European strategist at Raymond James. "If you put that in the mix, I would not be surprised that risky badets have gone up."
Oil prices were close to several months high, while worries about supply were worrying. reached $ 69.92 per barrel, its highest level since November and close to the psychologically significant level of $ 70 per barrel.
It was up 0.6 percent to $ 69.80. US WTI crude (West Texas Intermediate) rose 0.34% to $ 62.79 per barrel.
The news that the United States is considering more sanctions against Iran, the world's fourth largest producer of the Organization of Petroleum Exporting Countries (OPEC), and the interruption of production at an oil terminal in Venezuela have threatened to cut supply and drive up oil prices Tuesday.
BREXIT ROLLER CASE
The pound sterling further advanced as traders welcomed the UK's announcement in May to begin multi-party talks with the Labor opposition party, signaling that Britain would end up with a "softer" exit from the European Union.
The pound sterling strengthened 0.4% to 1.3196 USD, its highest level since 28th March. The British currency fell below 1.30 USD on Friday, due to growing fears of a Brexit without agreement.
The dollar strengthened 0.2% against the yen to $ 111.54 and the euro added 0.1% to buy $ 1.12170.
The, which follows the greenback against a basket of six major rivals, lost 0.19% to 97.176.
The bitcoin cryptocurrency, which jumped 18.7% Tuesday as a result of a large order placed by an anonymous buyer, extended its earnings 1.6% to $ 4,977.48.
plunged 0.08% to trade at $ 1,291.31 an ounce.
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