Global stocks trail U.S. rise on U.S.-Mexico trade deal optimism

Yuri Kageyama, The Associated Press
Published Friday, June 7, 2019 1:08AM EDT
Last Updated Friday, June 7, 2019 5:12AM EDT

TOKYO -- Global shares were mostly higher Friday on investor optimism about a possible trade deal between the U.S. and Mexico before tariffs take effect.

France's CAC 40 edged up 1.2% in early trading to 5,341.86. Germany's DAX added 0.6% at 12,019.60. Britain's FTSE 100 was at 7,313.81, up 07%. U.S. shares were set to drift higher with Dow futures gaining 0.3% at 25,823. S&P 500 futures also rose 0.3% at 2,854.

Japan's Nikkei 225 gained 0.5% to finish at 20,884.71, while Australia's S&P/ASX 200 rose nearly 1.0% to 6,443.90. South Korea's Kospi inched up less than 0.1% to 2,072.33. Chinese markets were closed for a holiday.

A modest Wall Street rally gained strength in the final hour of trading after Bloomberg reported that the U.S. was considering delaying a 5% tariff on Mexican goods, set to go into effect on Monday. The report came as the two countries held a second day of trade talks.

President Donald Trump said he'll make a decision about ramping up tariffs on China after he speaks with Chinese President Xi Jinping this month during the G-20 meeting in Japan, which brings together leaders of developed and developing countries.

Trump ordered tariffs of up to 25% on hundreds of billions of dollars' worth of Chinese exports and his administration is preparing to extend them to $300 billion more -- almost all items shipped to the U.S. from China. China has reciprocated with tariffs of its own, among other measures.

The trade dispute with Mexico and China threatens to stifle economic growth in the U.S. and globally. Uncertainty surrounding the trade negotiations has sent many traders fleeing to safer investments, like bonds and gold.

Investors are also watching the U.S. jobs data due later in the day for signs of where the economy is going.

"Asia markets look set to trail after the U.S. with moderate gains as worries on trade tuned a notch lower through the Thursday session. The attention, meanwhile, is mostly focused upon Friday's U.S. labour market update," said Jingyi Pan, market strategist at IG in Singapore.

ENERGY: Benchmark U.S. crude gained 90 cents to $53.49 a barrel. Brent crude oil, the international standard, rose $1.13 to $62.80 a barrel.

CURRENCIES: The dollar rose to 108.48 Japanese yen from 108.22 yen on Thursday. The euro strengthened to $1.1266 from $1.1231.

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