GLOBAL MARKETS-Stocks shrug off Trump's stimulus threat; pound jumps on Brexit trade deal hopes

* Possible Brexit deal buoys European markets
* Sterling jumps against dollar
* U.S., European bond yields climb

By April Joyner
NEW YORK, Dec 23 (Reuters) - Stocks rose on Wednesday as
investors waved away a threat by U.S. President Donald Trump not
to sign a pandemic relief bill, while the British pound soared
on rising expectations of a Brexit trade deal.
In a video posted on Twitter, Trump said the stimulus bill,
agreed upon after months of wrangling in Congress, was "a
disgrace" and that he wanted to increase "ridiculously low" $600
payments for individuals to $2,000. The benchmark S&P 500 .SPX U.S. stock index nonetheless
advanced as cyclical sectors such as energy and financials,
expected to benefit most from an economic recovery, led in
percentage gains.
Market analysts said they still believed a fiscal package
would come soon, whether under Trump, a Republican, or
President-elect Joe Biden, a Democrat. Some investors could be
holding out hope for even more aid given Trump's remarks, said
Phil Orlando, chief equity market strategist at Federated
Hermes.
"The Street must be thinking, 'Alright, we'll get a bigger
stimulus,'" he said. "Republicans have the president's cover to
sit down and negotiate a bigger deal."
In Europe, the STOXX index .STOXX ended 1.1% higher after
reports that Britain and the European Union were close to a
trade agreement after difficult, protracted negotiations, with a
year-end deadline looming. MSCI's gauge of global stocks .MIWD00000PUS in turn rose
0.63%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
240.06 points, or 0.8%, to 30,255.57, the S&P 500 .SPX gained
19.82 points, or 0.54%, to 3,707.08 and the Nasdaq Composite
.IXIC added 20.68 points, or 0.16%, to 12,828.60.
The Brexit trade deal news also boosted sterling GBP=D3 ,
which gained 0.92% against the dollar to $1.35. In a further
shot in the arm for the pound, Paris lifted its ban on freight
coming from Britain, which it had enacted in response to a
fast-spreading COVID-19 variant in the United Kingdom.
Foreign exchange markets broadly reflected optimism toward
U.S. fiscal stimulus and global growth. The euro EUR=EBS rose
0.12% to $1.2177, while the Australian dollar AUD=D3 ,
considered a riskier currency, advanced 0.81% to $0.7581.
Conversely, the safe-haven U.S. dollar resumed its decline.
The dollar index =USD fell 0.05%.
With a Brexit trade deal seeming likely, "investors are
looking once again to recovery," said Garrett Melson, portfolio
strategist at Natixis Investment Managers Solutions. "It was
being held up by the trade dynamic between Britain and the EU."
In accordance with Wednesday's risk-on sentiment, U.S.
Treasury yields jumped to their highest level since Dec. 7. They
received a lift from the Brexit trade deal developments after
having fallen earlier in response to Trump's stimulus comments.
The yield between two- and 10-year yields US2US10=TWEB
steepened to its the widest spread since October 2017. European
bond yields largely climbed as well.
Benchmark 10-year Treasury notes US10YT=RR last fell 12/32
in price to yield 0.9579%, from 0.918% late on Tuesday.
In oil markets, the weakening in the dollar and a drawdown
in U.S. crude inventories, based on data from the Energy
Information Administration, boosted prices. The EIA data
contrasted with the American Petroleum Institute's earlier
report showing a gain in inventories. Brent LCOc1 and U.S.
crude CLc1 both rose more than 2%. The weaker dollar also helped to boost gold XAU= , which
added 0.7% to $1,871.56 an ounce. Meanwhile, copper prices CMCU3 resumed their advance
toward multi-year highs as investors regained optimism toward
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Asset performance in US dollar terms https://tmsnrt.rs/33TWwY1
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