Asian stocks expected to rise

by Theleaders-Online | August 27, 2019 12:03 am

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

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