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Euro STOXX 600 up 0.4%

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30-year Treasury, JGB bond yields fall

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Tokyo mulls cutting super-long bond issuance, Reuters

reports

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Wall Street set for strong open after Monday's holiday

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Investors' focus on Nvidia ( NVDA ) earnings, Fed speeches

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Dollar headed for fifth-straight monthly decline

By Tom Wilson and Rae Wee

LONDON/SINGAPORE, May 27 (Reuters) - World shares gained

on Tuesday as investors weighed up the latest tariff-related

news, while long-dated U.S. Treasury yields were set for their

biggest one-day fall since mid-April, mirroring a steep price

rally in super-long Japanese debt.

After a weekend call with the European Commission's

president, U.S. President Donald Trump paused until July 9 his

threatened tariff of 50% on goods entering the United States

from the European Union.

European shares added 0.4%, supported by defence

stocks, with UK shares gaining 1% following a holiday at

the start of the week.

Wall Street shares, which also saw no trade on Monday due to

a U.S. holiday, were set for solid gains too, futures gauges

showed.

"Markets are getting more accustomed to Trump's threats and

now partly assume the full threat won't immediately

materialise," Deutsche Bank analysts wrote. "There is certainly

fear fatigue."

Meanwhile, the yield on 30-year U.S. Treasuries,

which affect anything from U.S. government borrowing costs to

home mortgage rates, fell 8 basis points to 4.9572%, their

lowest in a week.

The 30-year yields - at the epicentre of the market sell-off

in April following Trump's initial raft of tariffs - are still

just below 5%, near their highest since October 2023.

The move mirrored a near-20 basis point fall in yields for

Japanese 30-year debt that came after a Reuters

report on Tuesday that Tokyo will consider trimming issuance of

the super-long bonds, after recent sharp rises in yields.

"Debt sustainability is again creeping into investors minds"

regarding heavily indebted Japan, said Carsten Brzeski, global

head of macro for ING Research. "That is a spillover from the

concerns about the U.S."

A major focus for investors this week will be results

from Nvidia ( NVDA ) on Wednesday, where the AI bellwether is

expected to report a 66% jump in first-quarter revenue.

Speeches from a slew of Federal Reserve policymakers and

Friday's U.S. core PCE price index are also due, which could

provide clues on the outlook for U.S. rates.

In Asia, MSCI's broadest index of Asia-Pacific shares

outside Japan fell 0.4%, although Hong Kong's

Hang Seng Index outperformed with a gain of 0.4%.

LOSS OF CONFIDENCE

The dollar edged up 0.4% against a basket of currencies

but was still heading for a fifth straight month of

declines, which would mark its longest such losing streak since

2017.

The euro fell 0.3%, hovering near a one-month high

at $1.13549, while the yen weakened 0.6% to 143.71 per

dollar.

Trump's flip-flops on tariffs and concerns over the

worsening U.S. deficit outlook have undermined sentiment towards

U.S. assets and in turn been a drag on the dollar.

"A U.S. dollar regime change could be in the making in the

long term after it appears to have peaked recently," said David

Meier, an economist at Julius Baer.

"Erratic U.S. policymaking, the tense fiscal situation, and

large external indebtedness, against the backdrop of the twin

deficit, suggest that a weaker USD is the route of least

resistance."

And as the dollar loses some of its safe-haven appeal,

investors have instead sought alternatives such as gold, sending

prices to record highs this year.

Still, gold fell 1% to $3,307.69 an ounce as the dollar

firmed.

Oil prices were little changed on increasing expectations

that members of OPEC+ will decide to increase their output at a

meeting later this week.

Brent crude futures fell 0.4% to $64.50 a barrel.

U.S. West Texas Intermediate crude fell the same amount

to $61.26 a barrel.