Asian stocks driven by optimism over US-China trade negotiations

SYDNEY (Reuters) – Asian stocks hit a 9-month high on Monday after US Treasury Secretary Steven Mnuchin had hoped the US-China trade talks would come close to a final round. strong data from Chinese banks and exports have boosted confidence in the global economy.

The optimism generated by trade as well as the US Federal Reserve has halted its rate-cutting efforts and the fact that UK lawmakers are being granted an extension on leaving the EU has helped calm the markets. actions.

"Trade concerns between the US and China have diminished, the Fed is no longer raising rates and Brexit has been postponed, bode well for risky assets," said Takashi Hiroki, chief strategist at Monex Securities.

In the first European trades, Euro Stoxx 50 Pan-Regional Futures, German DAX Futures and FTSE London Futures each rose 0.2%. The E-Minis for the S & P 500 have changed little.

The largest MSCI index of Asia-Pacific equities outside Japan rose 0.4%, reaching its highest level since the end of July. Chinese equities were buoyant, with the CSI300 first class index rising 0.6%.

Hong Kong's Hang Seng added 0.3%, while KOSPI in South Korea grew 0.5%. Japan's Nikkei also joined the party, gaining 1.4% to reach its highest level since early December.

On Saturday, Mnuchin said a trade agreement between the United States and China would go beyond previous efforts to open Chinese markets to US companies and hoped that both parties would be "close to the last one". cycle "of negotiations.

Reuters also announced on Monday that US negotiators had softened the demands of China, which wanted industry subsidies to cease subsidies to the industry, a condition of a trade deal after Beijing's strong resistance.

"We are expecting a relatively favorable deal for the US-China market," said Ethan Harris, a world economist at Bank of America Merrill Lynch, in a note. "In our view, market and political concerns will limit future struggles. Think of "skirmishes" rather than "major battles". "

The Asian rally follows a strong Wall Street finish on Friday as traders applaud Chinese statistics showing exports rebounded in March and hit their highest level in five months as new bank lending jumped much more than expected.

Investors are worried about the slowdown in global growth this year as trade disputes and tighter financial conditions have affected demand. Worryingly, the International Monetary Fund has reduced its outlook for the global economy for the third time in six months.

There is also concern that weak key economies, including China, will spread to other countries, particularly if the increased trade tensions between Beijing and Washington worsen.

As a result, the Group of 20 industrialized nations called for a trade truce, signaling world leaders that they are ready to take action to reduce the risks of a global economic slowdown.

CURRENCIES

Investors will then turn to China's gross domestic product data for Wednesday, which is due to be released on Wednesday. A Reuters poll predicted growth of 6.3% over the previous year, its slowest pace since the global financial crisis a decade ago.

All eyes are also turned to the earnings of large US companies after the quarterly results of JPMorgan, which largely beat analysts' estimates last week.

In currencies, the dollar index fell 0.1% to 96.863 against a basket of major currencies, as demand for safe haven assets declined. He had slipped to a nearly three-week low of 96.745 on Friday.

The Australian dollar, which is often used as a substitute for Chinese games, was a little more moderate at $ 0.7173 but remains close to the seven-week high hit last week.

The euro strengthened slightly to USD1,1309 as dealerships prepared for Japanese demand when Mitsubishi UFJ Financial closed its acquisition of the multi-billion dollar DZ Bank air financing business. euros. [FRX/]

The common currency was also supported by encouraging data from the euro area, where industrial production in February fell less than expected.

In the commodities sector, oil provided important milestones last week. Brent has crossed the threshold of 70 USD and the US benchmark has recorded six consecutive weeks of gains for the first time since early 2016. [O/R]

Brent crude futures were 23 cents at $ 71.32, while crude futures, the US benchmark, declined 33 cents to $ 63.56.