GLOBAL MARKETS-Stocks edge higher but post monthly loss; yuan weakens as tariffs loom

* China's yuan on track for biggest monthly decline since
1994
* German real estate lifts European shares
* Emerging markets shares post biggest pct gain since June
* Euro hits lowest level since 2017; Argentine peso tumbles

(Adds close of U.S. markets)
By April Joyner
NEW YORK, Aug 30 (Reuters) - Hopes for a thaw in the
U.S.-China trade war helped a gauge of global stocks rise on
Friday despite a tepid performance on Wall Street, though
caution over pending American tariffs on Chinese goods put the
yuan on track for its biggest monthly decline in 25 years.
Statements from U.S. President Donald Trump and China's
commerce ministry on Thursday that the countries were scheduling
trade talks brought some respite to equities, which have been
roiled by the escalating trade war. The pan-European STOXX 600 .STOXX ended 0.7% higher,
helped by a surge in German real estate shares. The MSCI
All-Country World Index .MIWD00000PUS rose 0.35%. Emerging
markets shares .MSCIEF also jumped 1.5%, posting their biggest
daily percentage gain since June.
On Wall Street, the Dow Jones Industrial Average .DJI rose
41.03 points, or 0.16%, to 26,403.28, the S&P 500 .SPX gained
1.88 points, or 0.06%, to 2,926.46 and the Nasdaq Composite
.IXIC dropped 10.51 points, or 0.13%, to 7,962.88.
Despite the day's gains, MSCI's gauge of global stocks
posted its second monthly loss of the year and its biggest
August percentage decline since 2015.
Some market watchers expressed caution given the fluctuating
rhetoric and said U.S. markets, which will be closed on Monday
for the Labor Day holiday, could be especially vulnerable if
trade tensions re-escalate over the long weekend. The Trump
administration on Sunday is scheduled to begin collecting 15%
tariffs on more than $125 billion in Chinese imports, including
smart speakers, Bluetooth headphones and many types of footwear.
China's yuan CNH= fell 0.27% to 7.1616 per dollar and was
on track for its weakest month since Beijing's currency reform
in 1994. "Frankly, markets have been overly optimistic about trade,"
said Randy Frederick, vice president of trading and derivatives
for Charles Schwab in Austin, Texas. "I would caution people to
be a little careful because optimism won't last if it doesn't
ultimately materialize into something substantive like an
agreement."
Benchmark U.S. Treasury yields fell, with the yield curve
between 2-year and 10-year notes US2US10=TWEB still inverted,
seen as a signal that a recession is likely in one to two years.
Ten-year Treasury notes US10YT=RR last rose 4/32 in price
to yield 1.5028%, from 1.516% late on Thursday.
Italian bond yields registered one of their biggest monthly
decline in more than six years after the anti-establishment
5-Star Movement and opposition Democratic Party reached an
agreement on a coalition government. Among currencies, the euro EUR= reached its weakest level
since May 2017 as expectations grew for aggressive easing by the
European Central Bank following weak economic data on Thursday.
The euro was last 0.57% lower at $1.10.
Argentina's peso ARS= slumped 2.8% on Friday after
Standard & Poor's cut the country's long-term credit rating. In
August, the peso logged its biggest-ever monthly percentage
drop. The dollar index .DXY rose 0.31%.
The safe-haven Japanese yen JPY= rose 0.24% to 106.24 per
dollar and was on track for its biggest monthly gain since May.
Sterling GBP= fell 0.18% to $1.2166 ahead of a crucial
period for the British parliament before it is suspended ahead
of Britain's scheduled exit from the European Union on Oct. 31.
In commodities, spot gold XAU= fell 0.25% to $1,523.55 an
ounce but was set for its fourth straight month of gains. Silver
XAG= rose 0.59% to $18.35 per ounce and was on track for its
biggest monthly percentage gain since June 2016. Oil prices fell on concerns that disruption from Hurricane
Dorian, headed for Florida, could dampen demand. U.S. crude
CLc1 settled 2.84% lower at $55.10 a barrel, while Brent
LCOc1 settled at $60.43 a barrel, down 1.06% on the day.
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