SYDNEY (Jan 18): Stocks in Asia looked set to gain Friday amid optimism for progress in U.S.-China trade talks that lifted U.S. equities and Treasury yields.
Futures pointed to gains for equities in Japan, Australia, China and Hong Kong. The S&P 500 pushed above its average price for the past 50 days, a level it hadn’t breached since December, after the Wall Street Journal reported Treasury Secretary Steven Mnuchin is a proponent of easing tariffs. Some of those gains eased as the Treasury Department denied the report. The dollar was little changed.
Sentiment remains fragile on the outlook for trade tensions. Offering some relief from concerns about a worsening outlook for U.S. growth was the Federal Reserve Bank of Philadelphia’s factory index, which rebounded in January after three months of declines. Risk assets are posting a strong January amid signs of support from policy makers in the U.S. and China, with global equities heading for a fourth week of gains.
“Certainly evidence that the administration is approaching a deal would be good news,” said Laura Rosner, senior economist at MacroPolicy Perspectives. “We’ve heard noise around trade policy before though, so I would want to make sure the progress happens and sticks.”
Meanwhile, Chicago Fed President Charles Evans said the American economy is doing well, but “I think we can easily be patient” in deciding on interest-rate increases, chiming with dovish messages from colleagues in prior weeks. Elsewhere, sterling climbed to a two month high after U.K. opposition leader Jeremy Corbyn said that a second referendum remains an option in the Brexit saga.
These are the main moves in markets:
* Futures on Japan’s Nikkei 225 rose 0.7 percent in Singapore.
* Hang Seng futures added 0.4 percent.
* The S&P 500 Index rose 0.8 percent.
* The yen was at 109.24 per dollar.
* The offshore yuan slid 0.2 percent to 6.7780 per dollar.
* The Bloomberg Dollar Spot Index was steady.
* The euro bought $1.1389.
* The pound gained 0.8 percent to $1.2988.
* The yield on 10-year Treasuries rose three basis points to 2.75 percent.
* Australia’s 10-year yield gained four basis points to 2.32
* The Bloomberg Commodity Index rose 0.2 percent.
* West Texas Intermediate crude was little changed at $52.28 a barrel.
* Gold decreased 0.1 percent to $1,291.87 an ounce.