* World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Data shows China factory gate prices decline accelerate
Sentiment still fragile due to U.S.-China trade war
* German investor sentiment worsened less-than-expected
* All eyes on Brexit ahead of EU summit later in the week
By Karin Strohecker
LONDON, Oct 15 (Reuters) - Global stocks edged higher on
Tuesday yet safe havens were still in play as markets tried to
balance fading optimism over the latest China-U.S. trade truce
with the likelihood of a Brexit deal by Thursday's European
Union summit.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.2% with European stocks climbing briefly to a two-week
high after comments from the European Union's chief Brexit
negotiator that a deal with Britain over the terms of their
divorce was still possible this week.
The pan-European STOXX 600 .STOXX added 0.4% with France's
CAC .FCHI and Germany's export-oriented DAX .GDAXI both
rising while Britain's FTSE .FTSE slipped 0.3% as sterling
rose against the dollar and the euro, reflecting the cautious
optimism about talks between Britain and the EU.
Yet capping broader gains in equities was a perceived lack
of progress coming out of U.S.-China trade negotiations.
Reports of a "Phase 1" trade deal between the United States
and China last week had earlier cheered markets but the dearth
of details around the agreement has since curbed this enthusiasm
with oil prices extending declines, Chinese stocks weaker and
the safe-haven yen holding gains versus dollar.
"Not enough was achieved to alter meaningfully the
fundamental global economic outlook," said Mark Haefele, chief
investment officer at UBS Global Wealth Management.
"Global growth is still slowing and is below trend ... There
is still scope for earnings disappointment and the remaining
uncertainty from trade tensions means business investment is
unlikely to improve markedly."
Asian shares had nudged slightly higher while Japan's Nikkei
stock index .N225 was up 1.9%.
U.S. stock futures ESc1 rose 0.2% after the S&P 500 ended
0.14% lower on Monday with investors bracing for earnings from
financial heavyweights.
First numbers gave a mixed picture. JP Morgan JPM.N
beating quarterly profit estimates by a wide margin thanks to
strong bond trading, underwriting and home lending revenue,
while Goldman Sachs GS.N reported a slump in profit on lower
fees and weakness in underwriting. Citi C.N , Wells Fargo WFC.N and Blackrock BLK.N are
also reporting results.
POSSIBLE BUT DIFFICULT
But the focus firmly remained on Europe where officials from
Britain and the EU will meet at a make-or-break summit on
Thursday and Friday that will determine whether Britain is
headed for a deal to leave the bloc on Oct. 31, a disorderly
no-deal exit or a delay. The main sticking point remains the border between EU member
Ireland and the British province of Northern Ireland. Some EU
politicians have expressed guarded optimism that a deal can be
reached. But diplomats from the EU have indicated they are
pessimistic about British Prime Minister Boris Johnson's
proposed solution for the border and want more concessions.
Those concerns did little to quash market optimism for now,
with Britain expected to make new proposals on Tuesday.
Euro zone bond yields slipped. Germany's 10-year yield was
down 1 basis point to -0.47% DE10YT=RR , hovering just below
2-1/2 month highs, also helped by German investor sentiment
worsened less than expected. In the currency markets, the dollar gained for a second
consecutive day.
Optimism over a possible Brexit deal lifted sterling
GBP=D3 by as much as 0.7% to the dollar in early trading and
it approached a three-month high of $1.2708 before giving away
some gains. The pounds also climbed to a five-month high against
the euro. EURGBP=D3 GBP/
The yen JPY=EBS , often considered a safe haven in times of
economic uncertainty, held steady at 108.33 versus the dollar.
Markets were still considering the perceived lack of
progress in resolving a prolonged trade row between the United
States and China.
The United States agreed to delay an Oct. 15 increase in
tariffs on Chinese goods while Beijing said it would buy as much
as $50 billion of U.S. agricultural products after tense
negotiations last week.
However, Washington has left in place tariffs on hundreds of
billions of dollars of Chinese goods.
Trade experts and China market analysts say the chances are
high that Washington and Beijing will fail to agree on any
specifics - as happened in May - in time for a mid-November
meeting between U.S. President Donald Trump and Chinese
President Xi Jinping.
"We have the same agenda in front of us as we've had most of
this year -- which is trade war, Brexit, central bank policy,
geopolitical risks," said Peter Lowman, chief investment officer
at wealth manager Investment Quorum. "All that has been
simmering all year and it's continuing as we moving through the
rest of the year."
Chinese data also added to the woes. Latest numbers showed
that China factory gate prices declined at the fastest pace in
more than three years in September. That followed customs data
on Monday that showed Chinese imports had contracted for a fifth
straight month. Concerns over the health of the global economy weighed
heavily on oil prices, with U.S. crude CLc1 and Brent crude
both falling around 0.6% to $53.18 and $59.04 per barrel
respectively. O/R
By early last week, hedge funds had become the most bearish
towards petroleum prices since the start of the year, according
to an analysis of position records published by the U.S.
Commodity Futures Trading Commission and ICE Futures Europe.
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China's trade-war scorecard https://tmsnrt.rs/2VyzGPK
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