* Eyes on ECB meeting; euro zone fiscal stimulus prospect
* U.S. producer prices climb; Fed still expected to cut
* Oil drops on report Trump weighed easing Iran sanctions
(Updates with close of European markets, adds oil prices)
By Chuck Mikolajczak
NEW YORK, Sept 11 (Reuters) - A gauge of global equity
markets climbed on Wednesday, amid small signs of progress in
the trade war between the United States and China, while bond
yields rose as investors remained unsure what stimulus measures
the European Central Bank will provide at its Thursday meeting.
Stocks on Wall Street rose, buoyed by optimism on the trade
front after China announced its first batch of tariff exemptions
for 16 types of U.S. products, days ahead of a planned meeting
between trade negotiators. "Maybe a little bit of an olive branch. The market has been
sensitive to any developments on the China-U.S. trade war front
and this would be consistent with that," said David Joy, chief
market strategist at Ameriprise Financial in Boston.
"My own view is we shouldn't read too much into it because
it is something of long shot we are going to get any meaningful
breakthrough on that situation any time soon."
The Dow Jones Industrial Average .DJI rose 139.9 points,
or 0.52%, to 27,049.33, the S&P 500 .SPX gained 13.48 points,
or 0.45%, to 2,992.87 and the Nasdaq Composite .IXIC added
63.65 points, or 0.79%, to 8,147.80.
The trade hopes also aided in pushing European shares to
close at a six-week high, with shares of London Stock Exchange
ending the session up 5.9% after Hong Kong Exchanges and
Clearing 0388.HK made a surprise $39 billion takeover
approach. The pan-European STOXX 600 index .STOXX rose 0.85% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.56%, on pace for its sixth straight day of gains.
U.S. Treasury yields rose for a third day, tracking those in
the euro zone bond market, as investors were unsure about the
stimulus measures the ECB will engage in, with a late report on
Tuesday the central bank may delay quantitative easing adding to
the uncertainty. The 10-year yield hit a high of 1.752%, its highest level in
just over a month.
Benchmark 10-year notes US10YT=RR last fell 10/32 in price
to yield 1.7368%, from 1.702% late on Tuesday.
The European Central Bank's meeting comes ahead of next
week's policy meeting by the U.S. Federal Reserve which is still
widely expected to cut interest rates even as economic data
showed producer prices unexpectedly rose in August. Expectations for a 25-basis-point cut by the Fed at its next
meeting stand at 88.8%, according to CME's FedWatch, down from
92.3% on Tuesday. Market participants currently see no chance of
a 50-basis-point cut from the central bank.
U.S. President Donald Trump pushed the Fed to cut interest
rates to zero or into negative territory in a pair of Twitter
posts on Wednesday. In currencies, the euro weakened to a one-week low against
the dollar ahead of the ECB meeting, while the dollar was on
track for its best day in nearly two weeks against a basket of
major currencies. The dollar index .DXY rose 0.33%, with the euro EUR=
down 0.34% to $1.1006.
Oil prices slumped more than 2% after a report that Trump
weighed easing sanctions on Iran, which could boost global crude
supply. U.S. crude CLcv1 fell 2.56% to $55.93 per barrel and Brent
LCOcv1 was last at $60.94, down 2.31% on the day.
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GRAPHIC: U.S. yields rise https://tmsnrt.rs/2A9yEA3
GRAPHIC: Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC: Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
GRAPHIC: MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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