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GLOBAL MARKETS-Asia set to surge on trade hopes, pound jumps on exit polls

Published 13/12/2019, 09:35 am
© Reuters.  GLOBAL MARKETS-Asia set to surge on trade hopes, pound jumps on exit polls
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Stg surges as exit polls show Tories with majority

* Nikkei futures up sharply on reports of Sino-US trade deal

* Safe-haven bonds and the yen fall away

By Wayne Cole

SYDNEY, Dec 13 (Reuters) - Asian share markets were looking to steam higher on Friday amid reports a last-gasp trade deal had been struck that would avert new U.S. tariffs on China, while Prime Minister Boris Johnson's Conservative Party looked to have won a clear majority in the UK elections.

Sterling surged 2.3% in early Asian trade to $1.3467 GBP=D3 to hit its highest since mid-2018, and reached levels on the euro not visited since mid-2016.

A wave of trade relief overnight had already lifted Wall Street to record highs while hammering safe-haven sovereign bonds and the Japanese yen.

Exit polls suggesting the ruling right-wing Conservatives could gain a commanding 368 seats in Britain's Parliament seemed to settle another uncertainty and added to the cheer.

Early Friday, Nikkei futures NKc1 were up 1.4% and pointing to a similar gain for the cash index .N225 . E-Mini futures for the S&P 500 ESc1 climbed 0.8%.

Sentiment had soared on reports the United States has reached a "phase-one" trade deal in principle with China, and President Donald Trump had signed off on it. Street celebrated the 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%.

Other safe harbours also took a beating, with the yen sliding across the board. The dollar jumped further to 109.49 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 0.4% to $1.1166 EUR= , while the dollar dipped on a basket of currencies to 96.911 .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 6.9432 yuan CNH= having shed a steep 1.2% overnight.

Christine Lagarde had struck an upbeat tone on the economy in her first news conference as head of the European Central Bank on Thursday and promised a new style of leadership as she outlined a sweeping one-year review of the bank's workings. gold eased to $1,469.52 per ounce XAU= amid the general the shift from safe havens.

Oil prices rallied on hopes a trade deal would support global growth and thus demand. O/R

Brent crude LCOc1 futures rose 64 cents to $64.36, while U.S. crude CLc1 added 46 cents to $59.22 a barrel.

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Lisa Shumaker)

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