NEW YORK (Reuters) – Global equity markets and government bond yields fell on Wednesday as sentiment soured that a U.S.-China trade deal can be reached soon and on fears intensifying unrest in Hong Kong may lead to a Chinese crackdown.

Gold prices rose on fading investor optimism on the U.S.-China trade talks, helping to boost the appeal of the Swiss franc, Japanese yen and government debt as safe-havens.

A measure of emerging market currencies slipped, as did an index of emerging market equities, with both registering their largest single-day declines in almost three months.

The dollar was stable after a rise in U.S. consumer prices was greater than expected and Federal Reserve Chair Jerome Powell offered an upbeat economic outlook, bolstering the case for the U.S. central bank to pause its monetary easing cycle.

“It seems overnight there were a lot more fears that the U.S. and China were further apart on the trade deal than initially suggested,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

Powell said he saw “sustained expansion” ahead for the U.S. economy, with low unemployment boosting household spending and the full impact of the three interest rate cuts in the past three months still to be felt.

U.S. stocks traded little changed as investors eyed an improving economic outlook. But fears of a pending recession have lessened, a reason why the spread between short- and long-term Treasury yields has widened, said Joseph LaVorgna, chief economist for the Americas at French bank Natixis in New York.

“You’re going to see the market move higher. We’re going to consolidate and move higher because the fundamentals are pretty solid and that means that you’re going to get 10-year notes up over 2%,” LaVorgna said.

MSCI’s gauge of stocks across the globe shed 0.25%, while the FTSEurofirst 300 index of leading European shares closed down 0.2%. Stocks on Wall Streets traded either side of break-even.

The Dow Jones Industrial Average rose 83.87 points, or 0.3%, to 27,775.36 and the S&P 500 gained 1.33 points, or 0.04%, to 3,093.17. The Nasdaq Composite dropped 7.56 points, or 0.09%, to 8,478.53.

Emerging markets were hammered as anti-government protesters dug in across Hong Kong and set the stage for further confrontation as police said violence in the city had reached a “very dangerous and even deadly level.”

MSCI’s emerging markets equity index lost 1.31% and its emerging markets currency index fell 0.46%, both their biggest one-day declines since late August.

The Swiss franc rallied to a one-month high against the euro as hedge funds unwound some of their negative bets against the currency and as appetite for risky assets faltered due to the intensifying unrest in Hong Kong.

Against the euro, the franc gained as much as 0.5% versus the euro to 1.0881 francs per euro, strengthening to its highest levels since Oct. 9 while it gained by almost a similar margin against the dollar.

The dollar index rose 0.06%, with the euro down 0.05% to $1.1002. The Japanese yen strengthened 0.25% versus the greenback at 108.76 per dollar.

Oil prices reversed early losses after the Organization of the Petroleum Exporting Countries said it saw no signs of global recession and rival U.S. shale oil production could grow by much less than expected in 2020.

Powell’s comments on the U.S. economy also supported energy prices, but a second-day view of Trump’s remarks encouraged a flight to quality.

Brent crude futures rose 31 cents to settle at $62.37 a barrel, while U.S. West Texas Intermediate crude settled up 32 cents at $57.12 a barrel.

U.S. gold futures settled up 0.7% at $1,463.30 an ounce.

Benchmark 10-year U.S. Treasury notes rose 10/32 in price to push their yield down to 1.8722%.

Bond yields in the euro zone fell as investors in Europe weighed remarks on Tuesday by U.S. President Donald Trump on the trade outlook.

Tariffs would be raised on Chinese goods “very substantially” if China does not make a deal with the United States, Trump said in a speech at the Economic Club of New York.

Benchmark 10-year German government bond yields fell the most for a day since June, down 6 basis points at -0.3%. Most euro zone 10-year bond yields fell 4 to 6 basis points on the day.

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