* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Pound surges as exit polls show Tories with majority
* Nikkei futures up sharply on reports of Sino-U.S. trade deal
* Safe-haven bonds, yen fall away
* Markets scale back risk of rate cuts around the world
By Wayne Cole
SYDNEY, Dec 13 (Reuters) - Asian share markets were set fair on Friday on reports a last-gasp trade deal had averted new U.S. tariffs on China, while Prime Minister Boris Johnson's Conservative Party looked to have won a clear majority in UK elections.
The double dose of relief slugged safe-haven sovereign bonds and the Japanese yen, even leading investors to scale back the chance of more interest rates cuts around the world.
Sterling hit its highest since mid-2018 as exit polls seemed to rule out a shock win by the left-wing Labour opposition, and could help clarify the outlook for Brexit.
The pound was last up 2.3% at $1.3464 GBP=D3 and reached levels on the euro not visited since mid-2016.
"The mood is pretty positive if you're holding pounds," said Rodrigo Catril, senior FX strategist at National Australia Bank. "If the outcome is confirmed we wouldn't be surprised to see the pound trade towards $1.36."
Exit polls suggested the ruling right-wing Conservatives could gain a commanding 368 seats in Britain's Parliament, settling another long-standing uncertainty. now looked likely to have the power to push through Brexit, though trade talks with the European Union could still drag on for months.
A wave of trade relief had already lifted Wall Street to record highs. Reuters reported the United States has agreed to reduce some tariffs on Chinese goods and delay a tranche of tariffs as part of a trade deal. also has agreed to make $50 billion in agricultural purchases in 2020 as part of the deal, that person and another U.S. source familiar with the talks said.
"If the U.S. cuts the current tariffs to some extent as reported, that is not something markets have priced in, so we could see a further leg up in the stock market," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE:MS) Securities in Tokyo.
"The Conservatives appear to be on course for a big win. We are now finally seeing a clear direction on Brexit after three years of deadlock."
LESS NEED FOR RATE CUTS
Early Friday, Nikkei futures NKc1 pointed to opening gains of around 2% for the cash index .N225 , while Australian stocks .AXJO firmed 0.5%.
E-Mini futures for the S&P 500 ESc1 rose another 0.3% and EUROSTOXX 50 futures STXEc1 added 0.7%.
Wall Street had celebrated the trade news with record highs. The Dow .DJI ended Thursday up 0.79%, while the S&P 500 .SPX gained 0.86% and the Nasdaq .IXIC 0.73%.
Bonds sold off, sending yields on U.S. 10-year Treasuries US10YT=RR up 10 basis points to 1.89%.
Interest rate futures 0#FF: slipped as the market priced in less chance of a rate cut from the Federal Reserve next year - a shift seen in a range of other developed nations.
Other safe harbours also took a beating, with the yen sliding across the board. The dollar jumped further to 109.52 yen JPY= having risen 0.7% overnight.
The dollar fared less well elsewhere as the pound and the euro both benefited from relief over the UK exit polls. The euro added 0.5% to $1.1189 EUR= , while the dollar dipped 0.35% on a basket of currencies to 96.742 .DXY .
The dollar also lost out to the Chinese yuan to hit an 18-week low as any truce would be a boon for the export-heavy economy. The dollar was last at 6.9298 yuan CNH= having shed a steep 1.2% overnight.
Christine Lagarde had struck an upbeat tone on the European economy on Thursday in her first news conference as head of the European Central Bank, promising a sweeping one-year review of the bank's workings. shift from safe havens saw spot gold ease to $1,465.60 per ounce XAU= .
Oil prices rallied on hopes a trade deal would support global growth and thus demand. O/R
Brent crude LCOc1 futures rose 76 cents to $64.48, while U.S. crude CLc1 added 16 cents to $59.34 a barrel.
https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations
https://tmsnrt.rs/2Dr2BQA
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Lisa Shumaker and Sam Holmes)