Asian bulls dare to hope on trade negotiations, stimulus

SYDNEY (Reuters) – Asian stock markets broadly rebounded on Monday, as investors dared to expect both US-China trade talks in Washington this week and more stimulus from big central bank policies.

The broadest MSCI index of Asia-Pacific equities outside Japan rose 1% after a sharp drop last Friday.

Japan's Nikkei climbed 1.8% to its highest level of the year, while the leading Australian index rose 0.7%.

Shanghai blue chips rebounded 1.6%.

But the E-Mini futures for the S & P 500 remained unchanged, the trade having been negated by vacations in the US markets.

The Dow Jones and Nasdaq have touted their eighth consecutive consecutive wins over the US and China bets on an agreement ending their long-running trade war.[.N]

Both parties will resume negotiations this week. US President Donald Trump said he could extend the March 1 deadline for an agreement. Both reported progress after five days of negotiations in Beijing last week.

"This does not rule out one or two setbacks by the beginning of March," said ABC analysts in a note.

"Nevertheless, we still think that both sides have good reason to want to reach an agreement. And, so motivated, it makes an agreement more likely than improbable. "

More and more more powerful central banks around the world are expecting more and more reflationary policies.

The need for an economic stimulus was highlighted Monday by data showing a sharp decline in Singapore's exports and a sharp drop in foreign orders for Japanese equipment goods.

Beijing has already taken steps to get Chinese banks to get the most new loans ever in January, with the goal of boosting unproductive investments.

The report of the latest Federal Reserve meeting is scheduled for Wednesday and is expected to provide further guidance on whether or not a rate hike is likely this year. There is also talk of the bank maintaining a much larger balance sheet than expected.

"Given the number of speakers supporting" patience "since the January meeting, the Fed's minutes should reiterate a broadly conciliatory message," TD Securities analysts said in a note.

A call from Fed officials speaks at various events this week, including a roundtable Friday on the future of its balance sheet. [FED/DIARY]

EYES OF THE ECB

Olli Rehn, of the European Central Bank, told a German newspaper Sunday that the latest statistics point to a weakening of the euro zone's economy and that interest rates would remain at the level of the euro zone. until the monetary policy objectives are met.

This came amidst many rumors that the ECB would launch another round of targeted long-term refinancing operations (TLTROs) to support bank lending.

The risk of an easy ECB saw the euro hit a three-month low on Friday before bouncing back on dovish comments from Fed officials.

The single currency increased slightly to US $ 1,309, but was still in the trading range of US $ 1,1213 to US $ 1,1570 since mid-October. The dollar remained stable on the yen at 110.53, after having pulled out of a peak of 111.12 in two months.

Sterling is shown firmer at $ 1,2909 before Brexit talks between British Prime Minister Theresa May and European Commission President Jean-Claude Juncker this week.

All left the dollar at 96.811 on a basket of currencies, a little behind the peak of 97.368 last week.

In commodity markets, spot gold rebounded 0.28% to US $ 1,324.70 per ounce.

Oil prices reached their highest level since the beginning of the year, thanks to OPEC supply cuts and United States sanctions on Iran and Venezuela. [O/R]

US crude rose 36 cents to 55.95 dollars a barrel, while Brent crude rose 20 cents to 66.45 dollars.