Asian Stocks Drift on Trade Talks Wait-and-See: Markets Wrap

Marco Green
February 15, 2019

The dollar gained and Treasuries edged lower as data showed US inflation remained contained.

China's exports probably fell again in January from a year earlier, but at a slower pace than in December. Initial jobless claims also came in higher than estimated. Signs Congress would avert another shutdown boosted sentiment midday and shares drifted until the late slide that came with news that President Donald Trump intends to sign a government funding bill and simultaneously declare a national emergency to get more money for a border wall. Imports in December fell 7.6% from a year ago. But some observers suggested the retail figures, delayed four weeks due to the government shutdown, are out of sync with reality.

"We still have concerns about global growth and that centers on those U.S". Japan is shut for a holiday, so Treasuries won't trade until the London open after 10-year yields edged down to 2.63 percent last week.

Asian stocks were poised for a relatively muted start to trading Thursday as investors await developments from high-level trade talks between the USA and China and data on the Chinese economy. Data Wednesday is expected to show US consumer prices rose 0.1 percent in January, after falling 0.1 percent in December. Equities rallied in China where exchanges reopened after a one-week holiday, and climbed in Hong Kong. European core sovereign bonds rose and the single currency strengthened after data showed the euro region's biggest economy stagnated in the fourth quarter, but dodged recession.

Oil continued its rebound from a two-week low, after Saudi Arabia pledged to deepen output cuts, and held most of those gains even after USA crude stockpiles came in larger than anticipated.

Elsewhere, the pound held on to gains as U.K. Prime Minister Theresa May updated lawmakers on the progress of Brexit talks with the EU.

Steven Mnuchin and Robert Lighthizer are in Beijing for high-level talks, and will meet China President Xi Jinping on Friday, the South China Morning Post reported. Trade tensions are ratcheting up as investors evaluate the prospects for a US-China deal before the March 1 deadline for higher tariffs, as warnings mount that the dispute is curbing the global economic expansion and denting corporate profits.

Japan's Topix index advanced 0.9 percent as of 10:05 a.m.in Tokyo. Futures on the S&P 500 rose 0.3 percent.

Shares in Shanghai surged on trade hopes, and the Stoxx Europe 600 Index rose for a third day. The offshore yuan held its rise after strengthening for the first time in five days overnight.

Other reports by Click Lancashire

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