Europe stocks advance with bonds following EU election

Bloomberg

Stocks rose in Europe on Monday and markets were mixed in Asia as investors mulled three weeks of global declines amid escalating US-China trade tensions. Core sovereign bonds in the European Union advanced after mainstream parties held their ground against populists in elections.
The Euro Stoxx index rose, helped by Fiat Chrysler’s proposed merger with France’s Renault, which drove up both carmakers’ shares. US stock futures drifted. In Asia, shares rallied in China, climbed in Japan and slipped in Hong Kong. The yuan steadied after a senior Chinese economic official said speculators “shorting the yuan will inevitably suffer from a huge loss.”
The yen fell as the US and Japan discussed a trade deal.
With holidays in the UK and America on Monday, trading volumes could be lighter than usual.
Investors are looking for signs of stabilisation after trade frictions and mixed economic data put global stocks on course for their first monthly decline of 2019. On a visit to Tokyo, President Donald Trump said the US is making “great progress” in trade negotiations with Japan even though a deal could come only after the country’s elections in July. At the same time, he said America isn’t ready to make a trade deal with China.
“There was a lot of speculation about an early US-China trade deal,” Paul Donovan, chief economist at UBS Global Wealth Management said in a research note. “The problem now is that while individual deals are helpful, the general uncertainty created by trade taxes is creating economic damage.”
Elsewhere, Brent oil futures turned higher. Iron ore continued its rally in Singapore, on concern there’s a global shortage in the seaborne market. And Bitcoin climbed to the highest level in a year, after surging almost 70 percent this month.
Executives from Facebook, Google, Apple, Amazon, Microsoft and Twitter are scheduled to speak before Canadian Parliament’s International Grand Committee on big data, fake news and privacy Tuesday. China provides the first peek at its May economic performance on Friday, with economists anticipating the official manufacturing PMI will tick down to 49.9 — a contraction — amid the worsening trade war with the US. US GDP data is due on Thursday.
The Euro Stoxx Index climbed 0.5 percent in New York. Futures on the S&P 500 Index declined less than 0.05 percent. The Shanghai Composite Index increased 1.4 percent, the largest climb in more than a week. The MSCI Asia Pacific Index advanced 0.2 percent.
The Bloomberg Dollar Spot Index gained 0.2 percent to 1,204.17. The euro fell 0.1 percent to $1.1197. The British pound dipped 0.2 percent to $1.2686. The onshore yuan gained less than 0.05 percent to 6.899 per dollar.
Germany’s 10-year yield fell one basis point to -0.13 percent, the lowest in almost three years.