* U.S.-China co-operation boosts sentiment
* U.S. jobs data expected to be worst in almost a century
* London stock exchange closed for bank holiday
(Updates prices, adds comments and chart)
By Elizabeth Howcroft
LONDON, May 8 (Reuters) - Global shares rallied on Friday,
hitting weekly highs, on signs of improving Sino-American
relations and the prospect of more governments gradually
reopening their economies.
The optimism contrasts with the economic data. U.S.
unemployment numbers due later on Friday are expected to be the
worst in a lifetime as the coronavirus pandemic ravages
economies.
Top U.S. and Chinese trade representatives discussed their
Phase 1 trade deal on Friday, with China saying they agreed to
improve the atmosphere for its implementation and the United
States saying both sides expected obligations to be met.
That calmed investors' fears about renewed trade tensions
after U.S. President Donald Trump and other top officials blamed
China for the spread of the new coronavirus and threatened
punitive action, including possible tariffs and shifting supply
chains away from China. "The threat of a breakdown in negotiations for now at least
has been averted," said Jeremy Stretch, head of G10 FX strategy
at CIBC Capital Markets.
"Though of course the president continues to persist with
some of his comments regarding the COVID outbreak, but at least
from the trade side it looks as though the participants involved
have dialled down the temperature a little bit," he added.
Improving sentiment also put European shares comfortably in
the black. The pan-European Stoxx 600 .STOXX up 0.7% at 340.27
points, holding close to weekly highs.
Germany's DAX .GDAXI and France's CAC 40 .FCHI were
also close to weekly highs, having crept up throughout the week.
U.S. stock futures for the S&P 500 ESc1 were up 1.16% to
2,913.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was 0.6% higher, while MSCI's main
European Index .MSER was up 0.8%, both holding close to weekly
highs.
The Euro STOXX 600 .STOXX was 0.7% higher, helped by the
construction and materials sector .SXOP .
Oil prices climbed as some countries moved ahead with plans
to relax economic and social lockdowns imposed to halt the
coronavirus pandemic, kindling market hopes for a boost in
demand for crude and its products. Brent crude LCOc1 was up 58 cents, or 1.97%, at $30.04 a
barrel. U.S. oil CLc1 gained 58 cents, or 2.5%, to $24.13 a
barrel.
Both contracts showed some easing from the morning's gains,
but they were still heading for a second week of gains after the
lows of April.
Core European bond yields were little changed, and the
spread between German and Italian ten-year government bonds
narrowed by 7 basis points DE10IT10=RR .
HISTORIC HIT
Unemployment data in the U.S. due at 12.30 GMT is expected
to show the U.S. economy lost a staggering 22 million jobs in
April That would be the steepest plunge in
payrolls since the Great Depression and the starkest sign yet of
how the coronavirus pandemic is battering the world's biggest
economy.
The pandemic has infected more than 3.5 million people, with
the number of deaths exceeding a quarter of a million, a Reuters
tally of official government data showed at the start of this
week.
In the United States, more than 75,000 people have died from
COVID-19. Deaths have averaged 2,500 people per day since
mid-April and about one in five workers has lost a job in the
past month. "It is important not to underplay the scale of this shock to
the U.S. economy and perhaps helps to explain why the U.S.
administration is so keen to get people thinking about returning
to work, especially since services makes up such a proportion of
the U.S. economy," said Michael Hewson, chief market analyst at
CMC Markets.
CIBC's Jeremy Stretch said that historical context was
necessary to interpret the record levels, because although
unemployment as a percentage of the workforce was higher in the
1930s, the size of the workforce was smaller then, so in terms
of raw numbers the coronavirus crisis has left more Americans
unemployed in one month than during the entire Great Depression.
The dollar slipped against a basket of six major currencies
.DXY in early trading as investors defied the broader sense of
doom. It was last down around 0.1%.
A public holiday in Britain means liquidity will be thin as
London markets are closed.
Gold remained near a two-week high reached in the previous
session as investors awaited the U.S. jobs report, with spot
gold XAU= holding just below the highest since April 27.
Financial markets began to price in the possibility of the
U.S. Federal Reserve's turning interest rates negative for the
first time, but fund managers and economists said there was
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Emerging markets http://tmsnrt.rs/2ihRugV
Futures show negative Fed policy rates by Dec 2020 IMAGE https://tmsnrt.rs/3b8qXdu
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