Pound jumps on expected Tory win; trade talk lifts shares

Sterling in strong start to new week

Pound rises sharply as Tory victory is expected

-China trade talks and hopes of an orderly Brexit after a landslide election victory for UK Prime Minister Boris Johnson lifted Europe's benchmark share index to within striking distance of an all-time high on Friday.

The British pound jumped to $1.3470 from $1.3150 late Thursday but then eased back to around $1.3400 as results showed the Conservatives winning at least 363 seats in Parliament with 648 out of 650 results declared.

In Asia, Japan's Nikkei 225 index jumped 2.6 percent to 24,023.10 and Hong Kong's Hang Seng surged 2.6 percent to 27,687.76. The Shanghai Composite index advanced 1.2% to 2,951.73 and South Korea's Kospi climbed 1.4% to 2,167.25.

Neither Washington nor Beijing have made official statements about reports of the deal, but U.S. President Donald Trump tweeted about it.

The US-China trade war looked set to de-escalate after US sources said Washington had set out its terms for a trade deal, offering to suspend some of the new waves of tariffs due on Sunday and to cut others.

"Completing the Brexit process remains a Herculean task that will take considerably longer than the eleven months now planned, but in the near-term we are likely to see United Kingdom equities move higher alongside sterling", said Karen Ward, chief market strategist, EMEA, at J.P. Morgan Asset Management. Shares likewise jumped today in Asia following fresh all-time highs overnight on Wall Street spurred by optimism that the USA and China are close to reaching a deal to end their costly trade war.

The pan-European STOXX 600 closed up 1.1%, buoyed by the major step forward in resolving a trade war that has hit global supply chains and roiled markets for over 16 months. At (1523 GMT), the Canadian dollar was trading 0.1% higher at 1.3171 to the greenback.

China's Ministry of Commerce said Thursday that its negotiators were in "close communication" with their American counterparts ahead of the new round of tariffs. In return, China would buy more USA farm products, increase American companies' access to the Chinese market and tighten protection for intellectual property rights, said Brilliant, who was briefed by both sides.

"If we get a China trade deal, it's probably going to catalyze another 12-plus months of growth in the USA and globally", Phillips said. The saving grace for the USA economy has been a strong job market and consumer spending. Prime Minister Giuseppe Conte said there was no need for state to help any Italian bank at present. Higher yields allow banks to charge more lucrative interest rates on mortgages and other loans.

The yield on the US 10-year note fell to 1.824% from 1.899% late on Thursday. That's an unusually large increase and signals more confidence in economic growth. The sector is one of the most sensitive to swings in trade because numerous companies rely on China for sales and supply chains.

Investors will get a look at new Commerce Department data Friday on USA retail sales in November. Economists expect retail sales rose last month. US crude oil futures were up 1.3% at $59.94 a barrel as hopes of progress in resolving the U.S.

Besides, Frankfurt's DAX soared 0.46 per cent to 13,282.72, French CAC 40 gained 0.59 per cent to 5,919.02 and Madrid's IBEX 35 rose 1.01 per cent to 9,563.70, while Italy's benchmark MIB FTSE winded down the day 0.26 per cent lower to 23,329.33.

The dollar rose to 109.68 Japanese yen from 109.32 yen on Thursday.

Brent futures, the global benchmark, gained $1.02, or 1.6%, to settle at $65.22 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 89 cents, or 1.5%, to $60.07.Both contracts settled at their highest since September 16, up a little over 1% for the week. The euro strengthened to $1.1177 from $1.1155.

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