Asian equities oscillate to their highest level in four months, driven by commercial optimism

TOKYO (Reuters) – Asian stocks came close to a four-month high on Tuesday, bolstered by hopes that Sino-US trade talks will progress positively and central banks look for stimulus packages.

While investors had no clear indication of the closing of the US markets for public holidays on Monday, the sentiment remains broadly positive, with the STOXX 600 European stocks index reaching its highest level in four months.

The MSCI's broadest share of Asia-Pacific equities outside Japan saw little change in early trading, remaining near the four-month high on Wednesday, as Japan's Nikkei was almost unchanged.

Reports of progress in trade talks between the US and China have led investors to be slightly optimistic that the two countries could reach a compromise to avoid tariff increases on March 1 although few details have emerged from the discussions.

US President Donald Trump said last week that it could extend its deadline of March 1, which would prevent an immediate increase in tariffs on Chinese imports for $ 200 billion from 10% at 25%.

Reflecting sentiment, Chinese equities have risen sharply so far this month, with the MSCI China A Equity Index up 6.5%, by far the best performer among major markets.

In addition, investors are now returning to riskier badet markets after the US Federal Reserve announced at the beginning of the year that it could put an end to rate hikes given the weakness of the US economy. .

"From the Fed, the world's central banks are no longer tending to tighten. The reversal of the Fed has put a damper on the strength of the dollar, allowing emerging-country central banks to adopt an easy monetary policy, "said Shuji Shirota, head of macroeconomic strategy at HSBC Securities.

"The global economy is not necessarily in shape, but we are in an environment of" mini-money caps "," he said.

In the currency markets, the euro and other risk-sensitive currencies were supported by hopes of US-China trade negotiations, although most currencies were locked in well-known ranges.

The euro has changed hands at 1.131 dollars, against 1.1234 dollars the lowest of three months Friday.

A series of smooth European economic data, including German GDP figures, weighed on the common currency.

Olli Rehn, of the European Central Bank, announced Sunday that the European Central Bank would launch a new series of targeted long-term refinancing operations (TLTROs) to support bank lending.

The dollar was 110.59 yen, down from the peak of 111.13 in seven weeks on Thursday.

The pound sterling trades at 1.2919 dollar, with an eye on negotiations between the UK and the European Union on Brexit.

The precious metals market was slightly more active, with palladium reaching a record high of $ 1,458.5 per ounce, while stricter emissions standards resulted in increasing demand for the autocatalyst metal.

Gold hit a record high of nearly 10 months of $ 1,327.40 an ounce.

Oil prices remained stable at their highest level in three months because of growing investor belief that OPEC supply cuts would prevent an accumulation of unused fuel.

Brent futures reached $ 66.83 on Monday, reaching their highest levels since mid-November.

Futures on US crude increased 0.5% early in the session on Tuesday to $ 55.86.