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* Market awaits Trump speech for trade deal news
* Reports Trump to delay auto tariffs on EU for 6 months
* Oil rises further above $62 on trade deal optimism
* Dollar lifted by cautious optimism
By Herbert Lash
NEW YORK, Nov 12 (Reuters) - Equity markets and government
bond yields rose on Tuesday as investors awaited a speech by
U.S. President Donald Trump on U.S. trade policy, in which he is
expected to discuss talks with China and a tariff decision on
European automakers.
Hopes for the speech were two-fold. First, that there would
be reassurances the China talks were progressing and second,
that there would be a nod to overnight reports that a decision
on European car tariffs would be delayed another six months.
Rising technology shares helped Wall Street hit fresh record
highs while European shares edged back toward four-year highs
. MSCI's gauge of worldwide equity performance
climbed to almost 1% shy of a record peak set in
January 2018.
A steepening bond market yield curves also signaled
increasing confidence that a recession would be avoided.
Trade-sensitive chipmakers helped pushed Europe's STOXX 600
up 0.53% as the Philadelphia semiconductor index rose
0.89%.
Overnight in Asia, MSCI's broadest measure of Asia-Pacific
shares outside Japan climbed 0.5% while Japan's
Nikkei ended 0.8% higher.
While Trump's speech could deliver the unexpected, any
downside is likely to be limited, said Candice Bangsund, a
global asset allocation strategist at Fiera Capital in Montreal.
If we do see some near-term weakness, that's a good
opportunity to get back into the market," Bangsund said.
"Longer-term we're confident that equities are going to not
only post positive results but also outperform fixed income in
the coming year."
Remarks by Trump over the weekend, that there had been
incorrect reporting about U.S. willingness to lift tariffs on
China, sent markets lower on Monday.
Investors were also anxious about Hong Kong after a violent
escalation of protests knocked 3% off the key Hang Seng index
and nearly 2% off Asia-exposed banks HSBC and
StanChart in recent days.
Hong Kong's embattled leader Carrie Lam on Tuesday said
protesters who were trying to "paralyze" the city were extremely
selfish and hoped all universities and schools would urge
students not to participate in violence.
Bond markets were also stirring again.
A partial holiday in the United States had closed the
Treasury market on Monday but there was an early milestone on
Tuesday as the gap between short-term 3-month and longer-term
10-year yields hit the widest level of the year so far.
That widening, or steepening of the 'curve' as it is also
known, adds to signs that the fears that took hold earlier in
the year that the country was heading into recession, were
receding again.
"Recession fears are misplaced. We are not ripe for an
extended bear market," Bangsund said.
Treasury yields on 10-year notes were 1.9417%,
having slipped from last week's three-month top of 1.97%.
European yields were also a touch higher.
In currency markets, the dollar was moving higher against
most currencies ahead of Trump's trade speech.
The dollar index rose 0.15%, with the euro
down 0.18% to $1.1012. The Japanese yen weakened 0.08%
versus the greenback at 109.16 per dollar.
Gold, meanwhile, looked to be heading for a third day of
declines, touching its lowest since early August at $1,447.89
per ounce at one point before steadying around $1,451.
U.S. crude gained 31 cents to $57.17 a barrel, while
Brent crude futures added 25 cents to $62.43.
(Reporting by Herbert Lash; Editing by Bernadette Baum)
