NEW YORK (Reuters) – Bond yields edged higher while a gauge of global equity markets hit a record high on Monday, lifted by optimism over the planned signing this week of a U.S.-China trade deal and hopes the start of the U.S. corporate earnings season will not disappoint.
Gold prices fell almost 1% ahead of the signing at the White House on Wednesday of the Phase 1 trade deal and as a de-escalation in U.S.-Iran tensions in the Middle East reduced bullion’s safe-haven appeal.
U.S. and euro zone government bond yields rose as the trade deal marks a major step in ending a dispute that has cut global growth and boosted demand for such safe-haven assets as bonds, gold and currencies like the Japanese yen and Swiss franc.
MSCI’s gauge of stocks across the globe gained 0.45%, topping a record set Friday, while emerging market stocks rose 0.96%. The benchmark S&P 500 and tech-heavy Nasdaq composite indexes also hit fresh highs on Wall Street.
The United States is planning to lift its designation of China as a currency manipulator, Bloomberg reported, citing people familiar with the matter, a move that added to the positive mood among investors.
Middle East tensions rose after the United States killed a top Iranian general on Jan. 2 in Baghdad, knocking global stocks off a rally spurred in late 2019 on hopes a trade deal would be signed. Markets have rebounded as both Tehran and Washington desisted from further escalation after Iran retaliated for the killing with an missile attack on U.S. troops in Iraq.
Investors are waiting for corporate results that start in earnest this week with large U.S. banks, including Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co due to report on Tuesday. Excluding energy, earnings growth estimates are 1.9%,