NEW YORK (Reuters) - Government debt yields and a gauge of global equity markets rose on Wednesday as sentiment improved after U.S. President Donald Trump said trade talks with China were going “very well” and a news report suggested key differences were being ironed out.

FILE PHOTO: Jose Alvarez-Pallete Lopez, Chairman of the Board & Chief Executive Officer at Telefonica SA stands on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., December 3, 2019. REUTERS/Lucas Jackson

European stocks rallied, with the blue-chip Euro STOXX 50 .STOXX50e, Germany's DAX .GDAXI and French CAC 40 .FCHI gaining more than 1%. The news reversed overnight losses in Asia when investors remained jittery over the prolonged talks.

The safe-haven yen and Swiss franc fell as Trump’s encouraging comments on the U.S.-China trade negotiations boosted “risk-on” sentiment.

The dollar index .DXY fell after the Institute for Supply Management (ISM) reported activity in the U.S. services sector slowed more than expected in November amid lingering concerns about trade tensions and worker shortages.

The poor ISM reading failed to slow the equity rally because the underlying economic data overall is getting better, said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.

“It’s looking more and more like two things: One, we’ve certainly pushed back heavy fears of recession this year and the next thing is the realization that we might be accelerating again, not only here but globally,” Paulsen said.

Trump, who on Tuesday had roiled markets after he raised the prospect of extended U.S.-Sino trade tensions, told reporters at a meeting of NATO leaders near London that “discussions are going very well and we’ll see what happens.”

The market is now focused on Dec. 15, when new U.S. tariffs on Chinese imports are scheduled to take effect. Nobody knows whether Trump is serious about going forward with the tariffs or if the date is a bargaining chip, said David Lafferty, chief market strategist at Natixis Investment Managers.

“Dec. 15 will be the tell,” Lafferty told reporters. Because if he delays or defers on Dec. 15, we know he’s not serious.”

Market sentiment rebounded earlier when Bloomberg reported that the two sides were closer to agreeing on how many tariffs would be rolled back in a “phase one” trade deal.

MSCI's gauge of equity performance in 49 countries .MIWD00000PUS gained 0.47% while stocks on Wall Street also rose, snapping a three-day losing streak.

The Dow Jones Industrial Average .DJI rose 146.97 points, or 0.53%, to 27,649.78. The S&P 500 .SPX gained 19.56 points, or 0.63%, to 3,112.76 and the Nasdaq Composite .IXIC added 46.03 points, or 0.54%, to 8,566.67.

Investors also shrugged off a survey showing U.S. private-sector job growth unexpectedly slowed to its weakest pace in six months in November as goods producers and construction companies cut jobs.

Paulsen said the ADP National Employment Report is not that closely correlated with the payrolls data compiled by the U.S. Labor Department, which will release its November report on Friday. A slowdown in jobs creation in a tight labor market is understandable, he also said.

Yields on benchmark U.S. and euro zone government debt rebounded, with the 10-year U.S. Treasury note US10YT=RJR falling 18/32 in price to push its yield up to 1.7723%.

The 10-year German bund' s DE10YT=RR yield rose about 3 basis points to -0.316% and yields across the euro area followed suit, rising by 2 to 3 basis points.

The dollar index .DXY fell 0.12%, with the euro EUR= down 0.04% to $1.1077. The Japanese yen JPY= weakened 0.22% versus the greenback at 108.88 per dollar.

Oil prices jumped ahead of an expected extension to production curbs by the Organization of the Petroleum Exporting Countries and its allies. More support came from industry data showing a larger-than-forecast drop in U.S. crude stockpiles.

U.S. crude CLcv1 rose $2.33 to settle at $58.43 a barrel. Brent crude LCOc1 futures settled up $2.18 at $63.00 a barrel.

Renewed hopes over the trade talks prompted gold to erase earlier gains. U.S. gold futures GCv1 settled 0.3% lower at $1,480.20 an ounce.