World shares steadied near two-month highs on Monday, boosted by hopes for a trade deal and strong U.S. corporate earnings, while the dollar traded near its highest in a week before a Federal Reserve rate decision.
MSCI’s All Country World Index .MIWD00000PUS, which tracks shares across 47 countries, was up 0.04% on the day. It was just off its highest level since July 27.
But European shares fell as a glum profit outlook from HSBC offset gains by trade-exposed auto and mining stocks. The pan-European STOXX 600 index was down 0.16%.
The pound edged up after the European Union agreed to extend the deadline for Brexit until Jan. 31, 2020. It last traded 0.06% higher at $1.2844.
Euro zone bond yields rose in anticipation of the EU’s decision, after sources said the EU was most likely to grant one.
Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.5% to its highest since late July, for a third straight day of gains.
The CSI300 .CSI300 of blue-chip mainland China shares was up 0.8%. Hong Kong’s Hang Seng index .HSI jumped as much as 1.0%. Japan’s Nikkei .N225 rose 0.3% to a one-year high. The advances came after U.S. and European markets gained on Friday.
“Markets are likely to enter a standby mode ahead of the Fed’s rate decision on Wednesday amid ongoing developments in the China-US trade negotiations and the corporate earnings season,” Danske Bank said in a research note.
U.S. and Chinese officials are “close to finalizing” some parts of a trade agreement after high-level telephone discussions on Friday, the U.S. Trade Representative’s office and China’s Commerce Ministry said, with talks to continue.
U.S. President Donald Trump has said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile.