Global stocks climb on the trade, optimism of reduced rates the yuan weakens

LONDON (Reuters) – European stocks followed rising Asian equities on Monday after the US suspended plans to impose tariffs on Mexico and investors expected a drop in oil prices. US interest when the US Federal Reserve will meet next week, due to poor data on employment.

Investors worried that the opening of a new trade dispute, while continuing to fight with China, could push the United States and other major economies into recession . The Mexican peso rose more than 2% on Monday.

But in China, the yuan has fallen to its lowest level this year after the country's imports fell the most in nearly three years and talks to end the Sino-US conflict remain stalemated.

The pan-European STOXX 600 gained 0.3% at the start of the trade, while the UK's FTSE 100 gained 0.6%, while the S & P500 mini futures gained 0.3% after increased to 0.8%.

The 10-year US Treasury yield was 2.134%, after peaking at 2.053% in 21 months on Friday, according to data on non-performing jobs in the United States.

In Asia, the Tokyo Nikkei closed up 1.2%, while the MSCI Asia Pacific ex-Japan index rose to 1%.

"Markets make festive bubbles," said Jim Reid, a strategist at Deutsche Bank.

"There will be a relief that the [Mexican] tariffs have been avoided and some might think this shows Trump's propensity to make deals after the murder. As such, some might think that a similar situation could occur with China's trading situation. "

ADVANCED CARS

The European automotive sector was boosted by indications that Fiat Chrysler Automobiles NV and Renault SA were looking for ways to revive their collapsing merger plan and gain approval from Nissan Motor Co. Fiat Chrysler jumped 3 %, while Renault's shares were up 1%.

In London, Thomas Cook shares rose 20% after the announcement that Fosun Tourism, a Hong Kong-listed company, was in talks to buy out its tour operator business, with the British group facing a break-up after publishing three warnings about his profits over the past year.

Investors also equated Chinese data showing that imports in May fell 8.5% from the previous year, a result much worse than expected, revealing weak domestic consumption.

However, exports unexpectedly rose by 1.1% last month, although many suspect this rise to be related to the upstream loading of shipments by companies to avoid higher tariffs at the same time. United States.

"Mexico is not China and investors will want to see clear signs of improving US-China relations before increasing their exposure to risky assets. Prior to this, the market remains focused on the poor Chinese import figures for the month of May. [the People’s Bank of China] allows the yuan to trade at $ 7 per dollar, "said Chris Turner, head of FX strategy at ING Bank.

EYES ON THE EDF

In the United States, Federal Reserve rate cuts have kept the dollar on the defensive after the US Department of Labor report on job weakness.

Non-farm payrolls increased 75,000 jobs last month, well below the 185,000 additional jobs estimated by economists in a Reuters poll.

Federal funds interest rate futures, down on Monday after the agreement with Mexico, still projected a rate cut of more than 25 basis points by the end of this year, including a almost entirely in July.

The next political meeting of the Federal Reserve is scheduled for next week, June 18-19.

The euro is down nearly 0.3% against the dollar, to 1.1301 USD, which corresponds to a high of 1.13377 USD reached for 2 months and a half this Friday.

Eurozone government bond yields remained close to all-time lows. The bloc's core bond yields were still at record lows, despite a two-basis-point hike in the German Bund early in the session, at -0.24%, as expectations for the Fed's bond yields were lower. Easier monetary policy fuel purchases of bonds.

The euro is down nearly 0.3% against the dollar, to 1.1301 USD, which corresponds to a high of 1.13377 USD reached for 2 months and a half this Friday.

The onshore yuan fell 0.35% to 6.9366 dollars, its lowest since early December, when US President Donald Trump met with Chinese President Xi Jinping for trade talks.

Gold slipped nearly 1% after hitting its 14-month high at $ 1,348.1 on Friday, close to a major resistance around $ 1,350. .

Many investors are still hoping that Trump will meet with his Chinese counterpart Xi on the sidelines of the Group of 20 leaders' meeting, which will conclude this month to seek a compromise on trade and other economic issues.

Oil prices rose on Monday after Saudi Arabia said OPEC producer clubs and Russia should restrict supplies to current levels, with Brent crude futures in the first month $ 63.61, or 0.5%, above closing on Friday.