GLOBAL MARKETS-U.S. stock futures, Mexico peso gain on U.S.-Mexico deal

* S&P futures up 0.6%, Mexico peso up 1.6%
* Weak U.S. payrolls data bolster Fed rate cut expectations
* U.S. money market futures price in 2 rate cuts this year
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano
TOKYO, June 10 (Reuters) - U.S. stock futures jumped on
Monday after a migration deal between the United States and
Mexico late last week to avert a tariff war added to a weak U.S.
job data which cemented expectations of Federal Reserve rate
cuts.
S&P500 mini futures ESv1 rose 0.6% in early trade while
Japan's Nikkei .N225 looks set to gain 1.5 percent, based on
Chicago-listed futures price 0#NIY: .
U.S. Treasuries futures TYv1 dropped 13/32 in price while
U.S. interest rate futures gave back gains made after Friday's
soft payroll data.
The Mexican peso jumped more than 1.5 percent in early
Monday trade to 19.2895 on the dollar MXN= after the
migration deal between U.S. and Mexican negotiators removed
President Donald Trump's threatened tariffs on goods from Mexico
for now. The improved risk sentiment also helped lift the dollar
against the yen 0.2% to 108.45 yen JPY= .
"The deal with Mexico is boosting sentiment while
expectations of U.S. rate cuts will be also supporting share
prices," said Masahiro Ichikawa, senior strategist at Sumitomo
Mitsui DS Asset Management.
"Still, with limited progress seen so far in U.S-China trade
talks, the most important issue for markets, stock prices will
be able to rise only so much," he added.
On the whole, the dollar was undermined by rising
expectations the Fed will cut rates in coming months.
A U.S. Labor Department report showed nonfarm payrolls
increased by 75,000 jobs last month, much smaller than the
185,000 additions estimated by economists in a Reuters poll,
suggesting the loss of momentum in economic activity was
spreading to the labour market. The Fed funds rate futures are still pricing in more than
two 25-basis point rate cuts by the end of this year even after
their retreat early on Monday following the U.S.-Mexico deal.
The euro was little changed at $1.1329 EUR= near a
2-1/2-month high of $1.1348 touched on Friday. The common
currency held firm near five-month highs against sterling at
88.965 pence EURGBP= .
The offshore Chinese yuan traded at 6.9385 yuan per dollar
CNH=D4 , having hit a seven-month low of 6.9616 on Friday.
China's trade data due later in the day will be keenly
watched for the impact of intensifying frictions between
Washington and Beijing.
Group of 20 finance leaders on Sunday said that trade and
geopolitical tensions have "intensified", raising risks to
improving global growth, but they stopped short of calling for a
resolution of the deepening U.S.-China trade conflict.
(Editing by Shri Navaratnam)