GLOBAL MARKETS-China charges on, gold climbs to nine-year high

* China rally extends for eighth session, yuan soars
* Gold above $1,800/oz for first time since 2011
* Investors hope for positive outlook from U.S. earnings
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Marc Jones
LONDON, July 9 (Reuters) - European shares rose on Thursday
after a two-day wobble, as Chinese markets continued their
charge, while investors propelled gold to a nine-year high.
Chinese stocks set their longest winning streak in two
years, and the yuan had strengthened past 7 per dollar overnight
.SS , despite rising tension over Hong Kong and the economic
uncertainty caused by COVID-19.
It was the Shenzhen blue-chip index's eighth straight day of
gains, adding another 1.5% to its 15% surge this month, and it
helped Europe on an upward trajectory after initial hesitation
caused by uninspiring German data. .EU Also improving risk sentiment was the dollar's downward
momentum – it was at a one-month low against the euro EUR= , a
three-week low versus the British pound GBP= and a four-month
trough against the Swiss franc. /FRX
Wall Street was set for a steady start .N but the dollar's
lethargy was a green light for emerging markets too.
MSCI's EM currency index was at a one-month high, with the
equities equivalent .MSCIEF at its highest since late
February. Trade and commodity-related currencies also reacted to
China's surge. The New Zealand dollar was at its highest since
January and the Aussie dollar at a one-month high.
"We've seen a more generalised view back to riskier assets.
The Chinese equity surge has been the poster child for risk-on
move across the last few sessions," said Jeremy Stretch, CIBC
Capital Markets' head of G10 FX strategy.
Asia's investors have been riding high after a front-page
editorial in Monday's China Securities Journal that extolled
market fundamentals, which was taken as official encouragement
to buy stocks.
State-run media warned on Thursday that investors should
still pursue rational investments and manage risks, but that
didn't rein in the bulls.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.8% and touched a 20-week high. The yuan
CNY= rose to a four-month high as it broke through the
7-per-dollar barrier. FRX/
"Broadly speaking, the Chinese economy is coping better not
only with a recovery but also in dealing with the potential of a
second wave (of infections)," said National Australia Bank FX
strategist Rodrigo Catril.
"Rightly or wrongly, that market is liking the idea that the
yuan can strengthen on the back of equity inflows."
Deutsche Bank's chief international strategist, Alan Ruskin,
said the yuan enjoyed the "perfect combination" of tight
monetary policy, yield advantage and equity demand.
Although China's factory-gate prices fell for a fifth
straight month in June, signs of a pickup suggest a slow but
steady recovery remains intact. In Europe though, Britain suffered another 5,000 high street
jobs losses and Germany's export figures recovered less than
expected in May as demand remained subdued despite lockdowns
being lifted in large parts of Europe. GOING FOR GOLD
The Chinese rally came despite growing pressure from the
West over Beijing's tightening grip on Hong Kong, surging U.S.
coronavirus cases and a fresh lockdown of almost 5 million
Australians in Melbourne. Australia's benchmark ASX 200 index .AXJO rose 1% and
Japan's Nikkei .N225 rose 0.6%. The Australian dollar AUD=D3
rose 0.2% to $0.6995, but - perhaps indicating a cap on
exuberance - it was unable to break past resistance at $0.70.
U.S. Treasuries were not sold into the rally, though. Nor
were the safe havens of gold or the Japanese yen. The yield on
benchmark U.S. 10-year Treasuries US10YT=RR remained under
pressure at 0.6545% and gold XAU= sat at $1,810 an ounce.
The precious metal has now surged nearly 20% this year,
making it the best-performing global asset barring the
super-charged FAANG tech stocks which have soared nearly 50%.
The U.S. earnings season approaches, with investor hopes
high for a stabilisation, but warning signals are flashing and
Federal Reserve officials raised fresh doubts on Wednesday about
the durability of the rebound. The United States has also posted its largest number of
daily new coronavirus cases since the outbreak began and global
tensions are on the rise. U.S. jobs data out ahead of the start of trading showed just
over 1.3 million unemployment claims. Next Tuesday will see
results from J.P. Morgan JPM.N , Citigroup C.N and Wells
Fargo WFC.N , then Microsoft MSFT.O and Netflix NFLX.O on
Thursday.
"Earnings season is upon us, and we really want to see what
it looks like," said Jun Bei Liu, a portfolio manager at
Australia's Tribeca Investment Partners.

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