© Reuters. FILE PHOTO: A man looks at an electronic map showing the Nikkei stock index outside a broker in Tokyo
By Tomo Uetake
TOKYO (Reuters) – Asian stocks edged up on Monday, as the rebound in the Hong Kong market contributed to the relaxed atmosphere as investors remained cautious ahead of a meeting under close watch by the Federal Reserve.
But the smoldering trade dispute between the United States and China, as well as political tensions in the Middle East have limited risk appetite.
The MSCI's broadest composite index of Asia-Pacific shares out of Japan rose slightly by 0.1%, after being slightly open. Japan's average rose by a similar amount.
Asian markets quickly gained momentum after Hong Kong jumped 1.4%. At the end of the week, the head of the territory, Carrie Lam, presented a bill authorizing extradition to China.
The Hang Seng fell for three consecutive sessions until Friday, after the extradition bill triggered mass demonstrations and caused some of the worst unrest in the territory since Great Britain he had returned to the Chinese authority in 1997.
"Last week, the question seemed about to become a thorny issue between the United States and China.The bill being postponed to an indefinite date, the situation will probably calm down, which is good for the markets. ", said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management.
Mainland stocks also strengthened, with a 0.2% gain in the benchmark and a 0.2% gain in the CSI 300 first class.
US Secretary of State Mike Pompeo told Fox News Sunday that President Donald Trump would raise the issue of human rights in Hong Kong with Chinese President Xi Jinping at a possible meeting of the United States. two leaders at the G20 summit to be held in Japan this month.
Wall Street shares ended lower on Friday as investors became cautious ahead of the Fed meeting this week, a Broadcom warning (NASDAQ 🙂 on slowing demand weighed on chip makers and added to trade concerns between the United States and China. ()
Investors expect more evidence from the Fed after policymakers have anticipated a rate cut in recent weeks.
Good US data on retail sales released Friday returned to 21.7%, down from 28.3% on Thursday, as Fed rates fell at this week's meeting, according to the tool. FedWatch of CME Group. But the odds of easing at the July meeting remain high at 85%.
"The coming week should provide investors with clarity on three fronts that have been a source of uncertainty." The FOMC meeting, with updated forecasts, is at the center stage, "said Marc Chandler, chief investment strategist. market leader at Bannockburn Global Forex.
A private gauge on the eurozone's manufacturing sector as well as trade friction between the United States and China will also be closely monitored, said Chandler.
Financial markets were shaken by a sharp escalation of trade tensions between Canada and the United States in early May. Investors feared more and more that the worry between them could tip the global economy into recession.
Geopolitical tensions in the Middle East added a new layer of uncertainty after the United States accused Iran of attacking two oil tankers in the Gulf of Oman last week.
The hope that global central banks maintain financial opportunities has eased some of the fears, and all eyes are on the two-day Fed meeting that will begin Tuesday.
The Bank of Japan is also meeting this week and is expected to strengthen its commitment to maintain a massive stimulus package for some time.
The retail sales report also indicated that short-term US Treasury bond yields were higher, smoothing the yield curve.[L2N23L10H]
The 10-year benchmark bonds were at 2.091%, while the two-year bond yield increased slightly, narrowing the gap between the two-year and 10-year yields to 23.6 basis points versus more than 30 years ago.
A Reuters poll showed that a growing number of economists are expecting Fed policymakers to lower their interest rates this year, though the majority still see them as stable.
In FX markets, the basket of the six major currencies climbed to 97.583, its highest level in nearly two weeks, after US retail sales eased fears of a sharp slowdown in the world's largest economy .
The index last stood at 97,488, while the euro was 1.122 dollars, close to the lower end of its weekly trading range.
Oil prices rose on Monday after US Secretary of State Pompeo announced that Washington would take all necessary measures to ensure the safety of shipping in the Middle East, as tension mounted as a result of attacks on tankers last week.[O/R]
Futures contracts rose 0.4% to $ 62.24 per barrel, while West Texas Intermediate futures (WTI) rose 0.3% to $ 52.66.
was little changed at $ 1,341.48 an ounce after peaking at 14 months on Friday.
jumped overnight to $ 9,391.85, its highest level in 13 months. He was last quoted at $ 9,104.64.