➤ China trade talks continue, but Hong Kong protests could be a drag.
➤ Italy's Five Star Movement, opposition Democratic Party consider new alliance.
➤ Fed's Jackson Hole conference in focus this week.
➤ Brent crude oil climbs.
US stocks gained Aug. 19, alongside European shares, following mixed trade news and ahead of remarks from the Fed chief toward the end of the week, while Italian bonds dropped amid a deepening rift in the coalition government.
The S&P 500 rose 1.2% around 9:32 a.m. ET, while the Nasdaq 100 jumped 1.6%. European stocks were trading higher, with Germany's DAX index increasing 1.6%, the FTSE 100 rising 1.2% and France's CAC 40 adding 1.5%.
U.S. President Donald Trump said "we are doing very well with China, and talking!" Separately, he said he was "just not ready to make a deal yet" with China.
Trump called for a peaceful end to the monthslong protests in Hong Kong, warning that a violent resolution to the issue would "put pressure" on a potential trade deal with China.
Meanwhile, the U.S. Commerce Department reportedly plans to give the blacklisted Huawei Technologies Co. Ltd. another 90 days to buy supplies from American companies, though Trump is against doing business with Huawei.
The Shanghai SE Composite gained 2.1%, while Hong Kong's Hang Seng Index added 2.2%.
As the trade dispute continues, the People's Bank of China is reforming the mechanism used to establish the loan prime rate in a bid to lower borrowing costs for companies.
Japan's Nikkei 225 index added 0.7% as Japan's trade deficit widened more than expected in July.
The Kansas City Federal Reserve Bank's annual symposium in Jackson Hole from Aug. 22 to Aug. 24 is set to be closely watched by investors for signs of rate cuts beyond those warranted by a "mid-cycle adjustment" and any indication of a change to the Fed's inflation framework, TD Securities said in a note. The central bank cut rates by 25 basis points in July and markets are pricing in another 25-basis-point rate cut in September.
Fed Chair Jerome Powell is due to speak at the event Aug. 23.
Safe-haven assets retreated, with gold losing 1% to $1,508.6 per ounce and the Japanese yen depreciating 0.2% against the dollar. Treasurys and German Bunds also fell, as their 10-year yields gained 5 basis points each around 9:38 a.m. ET.
Italian sovereign bonds came under pressure, with 10-year yields adding nearly 6 basis points to 1.461%, as Italy's Five Star Movement and the opposition Democratic Party were reportedly considering forming a new government.
Five Star has thrown its weight behind Prime Minister Giuseppe Conte in a potential no-confidence vote against him, which could derail Deputy Prime Minister and League leader Matteo Salvini's plans to hold an early election.
Among currencies, the euro appreciated 0.1% against the dollar as Eurozone annual inflation eased to 1.0% in July from a prior estimate of 1.1%. Sterling depreciated 0.2%.
Brent crude oil gained 1.4% to $59.44 per barrel in the ICE Futures Exchange as the OPEC once again trimmed its 2019 outlook for global oil demand growth to 99.92 million barrels per day, while maintaining its forecast for 1.1% growth in 2020.
Elsewhere, Gibraltar has refused to seize Iranian oil tanker Grace 1, which has fueled tensions between Iran and the U.K. since July, the Financial Times reported. The U.S. did not want the ship to be released.
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