Asian shares turn up on Sino-U.S. trade truce hopes

Asian shares were higher on Thursday following a media report the United States and China have tentatively agreed to a truce ahead of a highly-anticipated weekend meeting of the two nations’ leaders in Tokyo.

The South China Morning Post (SCMP), citing sources, said Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports.

On Wednesday, U.S. President Donald Trump said a trade deal with his Chinese counterpart Xi Jinping was possible this weekend though he was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail.

Asian shares

Hopes the world’s two biggest economies would finally reach an agreement were enough to cheer investors.

  •  MSCI’s broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) up 0.8%.
  • China led the gains with its blue-chip index (CSI300) up 0.9%.
  • South Korea’s KOSPI index (KS11) added 0.6% while Hong Kong’s Hang Seng (HSI) and Japan’s Nikkei (N225) jumped about 1.2% each.
  • E-Minis for the S&P500 (ESc1) climbed 0.4% in late Asian trading while futures Eurostoxx 50 (STXEc1) rose 0.3% and those for London’s FTSE (FFIc1) added 0.1%.

Currency

The probability of a less aggressive Fed and expectations of a Sino-China trade truce helped ease the selling pressure on the U.S. dollar, which rose 0.2% to 96.348 on a basket of currencies from a three-month trough of 95.843.

  • The dollar bounced modestly against the yen to 108.13 and away from a low of 106.77. The euro likewise eased back to $1.13505 from a top of $1.1412.
  • The dollar’s gains took a little of the shine off gold, which broke a six-session winning stretch and eased to $1,403.94 per ounce.

Commodities

  • Oil prices ran into profit-taking, having gained overnight on a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise falls in refined product stockpiles.
  • Brent crude (LCOc1) futures eased 23 cents to $66.26, while U.S. crude (CLc1) lost 25 cents to $59.13 a barrel.

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