Global shares push higher, Treasury yields under pressure

• Global shares see relief rally
• Slew of corporate earnings on tap
• Treasury yields near lowest in over a month
• Yen strengthens on bets of more BOJ hikes

By Rae Wee and Stephen Culp

SINGAPORE/NEW YORK, Feb 6 (Reuters) - Global shares rose on Thursday in a slight relief rally as fears of an escalating trade war between the U.S. and its major trading partners ebbed, while U.S. Treasury yields came under pressure as traders pondered the country's rate outlook.

European stock futures pointed to solid gains ahead of a slew of earnings releases, extending a rally from the previous session in part due to a surge in healthcare stocks as sales of Novo Nordisk's NOVOb.CO blockbuster drug Wegovy more than doubled in the fourth quarter.

EUROSTOXX 50 futures STXEc1 rose 0.5%, while FTSE futures FFIc1 jumped 0.66%. DAX futures FDXc1 climbed 0.57%.

Wall Street was similarly poised for a positive open, with S&P 500 futures ESc1 and Nasdaq futures NQc1 gaining more than 0.2% each.

Amazon's AMZN.O earnings are due later in the day, where the pressure is on for it to deliver on lofty expectations for cloud computing after lacklustre reports from Microsoft MSFT.O and Alphabet GOOGL.O jolted investor faith in Big Tech's huge investments in artificial intelligence.

And though many uncertainties remain under U.S. President Donald Trump's new administration, markets were for now relieved that things were not worse, particularly with regard to the tit-for-tat tariff moves between the U.S. and its major trading partners.

That helped lift global share markets and kept the dollar in check, giving some respite to its peers that had been heavily battered at the start of the week.

"Relief is probably a good way to characterise (the market mood)," said Khoon Goh, head of Asia research at ANZ.

The People's Bank of China on Thursday again set a stronger-than-expected yuan midpoint fixing, though the yuan still weakened after China sought the World Trade Organization's intervention to rule on new tariffs imposed by Trump.

The onshore yuan CNY=CFXS fell to 7.2845 per dollar, while its offshore counterpart CNH=D3 eased 0.05% to 7.2862.

"Chinese authorities at this stage are not indicating or showing any intention of weakening the yuan as part of the response to the tariffs. I think that has definitely helped to calm the market down," said ANZ's Goh.

China's CSI300 blue-chip index .CSI300 jumped more than 1% as investors continued to bet on domestic AI firms following Chinese start-up DeepSeek's breakthrough.

The Shanghai Composite Index .SSEC gained 1.16%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.44%, while Japan's Nikkei .N225 tacked on 0.6%.

RATES OUTLOOK

U.S. Treasury yields were hovering near their lowest in over a month on Thursday, as investors were uncertain about the outlook for rates in the world's largest economy.

U.S. Treasury Secretary Scott Bessent said on Wednesday that while Trump wants lower interest rates, he will not ask the Federal Reserve to cut rates.

Bessent said in an interview with Fox Business Network that he and Trump are focused on the 10-year Treasury.

Bessent made the comments before Fed Vice Chair Philip Jefferson, who said he is content to keep the central bank's policy rate in its current position until policymakers get a better sense of the net effects of the Trump administration's policies on tariffs, immigration, deregulation and taxes.

The benchmark 10-year Treasury yield US10YT=RR was last little changed at 4.4322%, while the two-year yield US2YT=RR edged slightly higher to 4.2034%.

Futures point to just about 45 basis points worth of easing from the Fed by the year-end. 0#USDIRPR.

In currencies, the dollar was on the back foot.

"The central vibe running through trade has been the solid bid in U.S. Treasuries, with the U.S. dollar finding increased selling flows across the G10 FX complex," said Chris Weston, head of research at Pepperstone.

Against the dollar, the euro EUR=EBS hovered above the $1.03 level and last bought $1.0391, while sterling GBP=D3 held near a one-month high and was fetching $1.2483.

The Bank of England announces its rate decision later on Thursday, where it looks set to deliver a rate cut.

The yen JPY=EBS, meanwhile, rose 0.1% to 152.465 per dollar, helped by comments from Bank of Japan board member Naoki Tamura who said the central bank must raise short-term interest rates to at least 1% by the second half of fiscal 2025 to contain inflation risks.

In commodities, oil prices rose, steadying from a sell-off the previous day after Saudi Arabia's state oil company sharply raised March oil prices.

U.S. crude CLc1 edged 0.44% higher to $71.34 a barrel, while Brent crude LCOc1 rose 0.36% to $74.88 per barrel.

Gold XAU= resumed its rally to firm near a record peak, and was last at $2,865.72 an ounce. GOL/

"Gold is one of three things: it's an inflation hedge, it's a dollar hedge or it's a disaster hedge," said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois.

"For much of the last five or six years, I would say gold was a dollar hedge. Now it has become more of a hedge against things going wrong."

Trump's tariff approach sends currencies and stocks on wild ride https://reut.rs/3Emlzrs

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