SYDNEY (Nov 5): The British pound jumped to a two-week high on Monday on hopes Britain was inching closer to a smooth Brexit, while Asian stocks will likely have a nervous start amid worries about shaky Sino-U.S. trade relations.

With just five months to go until the UK exits the EU, Britain's divorce talks are at an impasse, fuelling huge uncertainty among businesses and causing the value of sterling to see-saw on any news about a possible breakthrough in the negotiations.

A Sunday Times report that an all-UK customs deal will be written into the agreement governing Britain's withdrawal from the EU was enough to cheer investors who sent the pound to $1.3062, the highest since Oct. 22.

The currency has faltered in seven of the 10 months of this year so far, losing as much as 3.6 percent.

British Prime Minister Theresa May's office called the Sunday Times report speculatory but added that 95 percent of the withdrawal agreement was settled and negotiations were ongoing.

Elsewhere, investors will keep their eyes peeled for any headline on the Sino-U.S. trade war ahead of a meeting of the leaders of the world's two biggest economies later this month.

Chinese President Xi Jinping delivers a speech at the China International Import Expo later in the day, which could provide further clues on the subject.

Markets had climbed early on Friday on hopes the United States and China were mending their relations, but gains faded on news a tariff deal may not be imminent.

The outlook for global shares has also been clouded by the prospect of faster rate rises in the United States amid robust economic data in recent months. On Friday, the world's biggest economy reported solid jobs growth for October, with wages at 9-1/2-year highs, further boosting expectations for a December rate rise.

"The U.S. employment report supports our view that the Federal Reserve will raise rates three more times from now until mid-2019," Capital Economics said in a note.

"After that, we suspect that the cumulative effect of monetary policy tightening will start taking a toll on the US economy, forcing the Fed to end its tightening cycle and pulling Treasury yields, the US stock market and the dollar down."

Broadly, trading is expected to be rangebound ahead of U.S. congressional midterm elections on Tuesday. Opinion polls show strong chances that Democrats may win control of the House of Representatives in the elections after two years of wielding no practical political power in Washington, with President Donald Trump's Republican Party likely to keep the Senate.

A Reuters analysis of the past half century shows stocks fared better in the two calendar years after congressional elections when Republicans control Congress and the presidency than when Democrats controlled the two branches, as well as during times of gridlock.

In commodities, oil traders will keenly await the outcome of negotiations on possible waivers to U.S. sanctions on Iran.

"Any deals allowing oil importers to continue buying from Iran could see prices come under further pressure," ANZ said in a morning note to clients.