GLOBAL MARKETS-Stocks rally, U.S. Treasury yield curve steepens on upbeat geopolitical news

* All three major U.S. stock indexes in the black
* European, emerging equities markets rally
* Pound rises after PM Johnson's setback in parliament
* U.S. Treasury yield curve steepens as long-dated yields
rise
* Hong Kong scraps extradition bill, boosting sentiment

(Updates to afternoon, adds graphic and story links)
By Stephen Culp
NEW YORK, Sept 4 (Reuters) - Stocks rebounded worldwide on
Wednesday, and the U.S. Treasury yield curve steepened as easing
geopolitical concerns and upbeat economic data from China helped
revive investor risk appetite.
A parliamentary vote in Britain raised hopes that the
nation's no-deal exit from the European Union could be
postponed, Hong Kong withdrew the contentious extradition bill
at the heart of recent protests and political risks in Italy
appeared to be easing, all of which brought buyers back to
equities markets. China's services sector expanded in August at its fastest
pace in three months as a jump in new orders prompted the
biggest hiring increase in over a year, according to the
Caixin/Markit services purchasing managers index (PMI).

"Geopolitics are lifting everything much in the way it
drowned everything yesterday," said Paul Nolte, portfolio
manager at Kingsview Asset Management in Chicago. "It's as if
the slate gets wiped clean and we're starting from zero every
day."
"The markets are very binary," Nolte added. "It's either
'happy days are here again' or 'things are terrible and we're
falling into the abyss.'"
The U.S. trade deficit shrank in July, according to the
Commerce Department, but bilateral gaps in goods trade with key
trading partners widened. The closely watched deficit with China
grew by 9.4% as the bruising Sino-U.S. trade war raged on and
the deficit with the European Union hit a record high.

The Dow Jones Industrial Average .DJI rose 212.06 points,
or 0.81%, to 26,330.08, the S&P 500 .SPX gained 27.56 points,
or 0.95%, to 2,933.83 and the Nasdaq Composite .IXIC added
94.49 points, or 1.2%, to 7,968.64.
The political developments in Europe and Hong Kong helped
fuel a rally in European stocks, sending them to one-month
highs. The pan-European STOXX 600 index .STOXX rose 0.89% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
1.10%.
Emerging market stocks rose 1.86%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.82%
higher, while Japan's Nikkei .N225 rose 0.12%.
The U.S. Treasury yield curve was at its steepest in two
weeks as improving risk sentiment sent longer-dated yields edged
higher. Benchmark 10-year notes US10YT=RR last rose 3/32 in price
to yield 1.4556%, from 1.466% late on Tuesday.
The 30-year bond US30YT=RR last fell 4/32 in price to
yield 1.9552%, from 1.95% late on Tuesday.
Fresh doubts about the scale of the European Central Bank's
stimulus caused the euro to rebound, while the dollar continued
its retreat from a more than two-year high against a basket of
major world currencies. The pound sterling recovered as efforts
to stop a no-deal Brexit advanced. The dollar index .DXY fell 0.51%, with the euro EUR= up
0.46% to $1.1023.
The Japanese yen weakened 0.33% versus the greenback at
106.30 per dollar, while sterling GBP= was last trading at
$1.2205, up 1.00% on the day.
Oil prices rose with the tide, with WTI crude on track for
its biggest daily percentage increase since June 10, boosted by
easing geopolitical tensions and the positive news about China's
services sector. U.S. crude CLcv1 rose 4.54% to $56.39 per barrel and Brent
LCOcv1 was last at $60.79, up 4.34% on the day.
Gold inched higher amid remaining economic concerns in the
shadow of the U.S.-China trade, but the precious metal still
hovered below its six-year peak. Spot gold XAU= added 0.3% to $1,551.80 an ounce.
Copper CMCU3 rose 2.53% to $5,752.00 a tonne.
Three-month aluminum on the London Metal Exchange CMAL3
rose 1.06% to $1,771.50 a tonne.

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GRAPHIC-Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC-World FX rates in 2019 http://tmsnrt.rs/2egbfVh
US STOCKS-Strong Chinese data, easing geopolitical worries push
Wall St higher for European stocks as political tensions ease
steepens as risk appetite drives long-dated
yields higher political risk lift German yields; Italy rally continues
prices rise over 4% on positive economic data from China
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