Stocks Climb, Bond Yields Rise On Trade Deal Hopes: Markets Wrap

Stocks in Asia headed for the biggest weekly rally since April 2016 amid fresh hopes for trade talks, with that renewed risk appetite looking set to extend into European and U.S. sessions. The yen slipped and Treasury yields jumped.

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The boost to sentiment came after Bloomberg News reported U.S. President Donald Trump is interested in reaching an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina this month and has asked key U.S. officials to begin drafting potential terms.

Hong Kong’s Hang Seng headed for its biggest rise in more than three years and stocks from Seoul to Tokyo surged, taking gains on the MSCI Asia Pacific Index to almost five percent for the week. Futures on U.S. and U.K. equity gauges climbed, while currencies from South Korea to Australia also joined the rally.

News of a phone call between Trump and Xi showed that the door is still open for U.S.-China trade talks. The phone call is positive, China Foreign Ministry spokesman Lu Kang said at a briefing Friday in Beijing. Sentiment proved resilient to underwhelming news from Apple (AAPL). that had weighed on U.S. equity futures. The dollar steadied as traders also awaited Friday’s key U.S. jobs report.

Prospects for easing tensions between leaders of the world’s two largest economies are helping round out a week that’s seen appetite for risk assets return following the October rout in equities. Doubts remain, though, on the capacity of earnings to deliver. Apple’s disappointing forecast for the key holiday period suggested weaker-than-expected demand for the company’s pricier new iPhones. Its shares tumbled more than 6 percent in after-hours trading.

“Positive comments from President Trump over U.S.-China trade tension are cheering the market in the short term,” said Tai Hui, chief market strategist for Asia Pacific at JPMorgan (JPM) Asset Management in Hong Kong. “While we are still cautious over a full resolution of recent tensions in the medium term, resumption of dialogue between Washington and Beijing would be good enough to investors for now.”

Elsewhere, oil prices steadied after tumbling again overnight in New York. In Europe, the pound edged  after Thursday’s biggest gain since April 2017, which was driven by signals of faster interest-rate hikes and hopes for a Brexit deal.

Here’s the key scheduled event to come on Friday:

The final U.S. jobs report before next Tuesday’s congressional elections may show that hiring improved and that the unemployment rate held at a 48-year low.

And these are the main moves in markets:

Stocks

The Hang Seng Index climbed 3.3 percent as of 2:20 p.m. in Hong Kong. The Shanghai Composite rose 2.4 percent. South Korea’s Kospi index surged 3.5 percent. Japan’s Topix index rose 1.6 percent. Australia’s S&P/ASX 200 added 0.1 percent. Futures on the S&P 500 Index advanced 0.7 percent after the underlying gauge increased 1.1 percent Thursday, capping a three-day surge of almost 4 percent. Nasdaq 100 futures gained 0.6 percent, reversing earlier declines.

Currencies

The yen slipped 0.2 percent to 112.99 per dollar. The offshore yuan rose 0.2 percent to 6.9008 per dollar after advancing more than 0.8 percent Thursday. The Bloomberg Dollar Spot Index was flat. The euro traded at $ 1.1424, up 0.1 percent.

Bonds

The yield on 10-year Treasuries rose four basis points to 3.17 percent, extending gains for the week. Australian 10-year yields advanced about four basis points to 2.69 percent.

Commodities

West Texas Intermediate crude added 0.1 percent to $ 63.72 a barrel. Gold slipped 0.1 percent to $ 1,232.53 an ounce, little changed on the week.

News – Investor’s Business Daily

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