Asian stocks expected to rise
NEW YORK: Asian stocks are set to gain at the open Tuesday as the erratic trade narrative turned hopeful, lifting U.S. equities. The dollar strengthened while 10-year Treasury yields were little changed.
Futures were higher in Tokyo and Sydney, with muted gains in Hong Kong. S&P 500 Index futures dipped.
U.S. shares recovered some ground on Monday following Friday’s swoon after President Donald Trump said prospects for a trade deal were better now than at any time since talks began last year.
France’s Emmanuel Macron said things were moving forward between the U.S. and China. The S&P 500 Index closed near session highs in a broad-based rally, though volume was almost 20% below average. The yen retreated.
Addressing reporters at the end of the Group of 7 meetings in France, Trump said the Chinese “want to make a deal very badly.”
Earlier Monday Trump said the prospects for a deal with China are better now than at any time since negotiations began last year, even as a top state-media editor in Beijing questioned his version of events.
The dialing down of trade tensions between the world’s two largest economies will be greeted with relief by investors as a tumultuous month for global markets comes to an end.
Still, sentiment remains cautious amid signs of a slowing global economy and as previous periods of trade calm have been quickly ended by surprise escalations.
“August may be coming to a close, but volatility does not appear to be going anywhere,” Erik Knutzen, chief investment officer, multi-asset class, at Neuberger Berman, said in a note Tuesday.
“As the late cycle continues, markets will likely remain sensitive to the daily news flow, with many letting headlines drive short-term decisions.”
Elsewhere, oil and gold steadied amid the risk-on move.
Events to keep an eye on this week:
- China industrial profits are out Tuesday.
- The second reading of Q2 U.S. GDP Thursday is expected to refine estimates of slightly lower economic growth.
- Bank of Korea policy decision and briefing is on Friday.
Here are the main moves in markets:
Stocks
- Futures on the Nikkei 225 rose 1% in Singapore.
- S&P/ASX 200 Index contracts were up 0.3%.
- S&P 500 futures fell 0.1% as of 8:16 a.m. in Tokyo. The S&P 500 Index increased 1.1%.
Currencies
- The yen traded at 106.10 per dollar after weakening 0.7%.
- The offshore yuan was steady at 7.1666 per dollar.
- The Bloomberg Dollar Spot Index was flat after rising 0.3%.
- The euro was at $1.1100, after falling 0.4%.
Bonds
- The yield on 10-year Treasuries climbed less than one basis point to 1.54%.
- The yield on two-year Treasuries rose one basis point to 1.54%.
- Australia’s 10-year bond yield rose four basis points to 0.93%.
Commodities
- Gold was at $1,527.10 an ounce.
- West Texas Intermediate crude rose 0.4% to $53.84 a barrel
