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Asia bulls dare to hope for trade talks, stimulus by Reuters



© Reuters. A man looks in front of an electronic board showing stock information at a brokerage house in Nanjing

By Wayne Cole

SYDNEY (Reuters) – Asian stock markets plunged widely on Monday as investors dared to hope for both advances in Chinese -US trade negotiations Washington this week and more political stimulus from major central banks.

MSCI's widest index of Asia-Pacific shares outside Japan increased by 1

percent and recovered from a sharp decline last Friday.

Japan climbed 1.8 percent to this year's highest level so far, while Australia's main index rose 0.7 percent.

Shanghai blueprints jumped 1.6 percent.

But the E-Mini futures for the flat that trade was thinned by a vacation in US markets.

Nasdaq and Nasdaq had boasted their eighth consecutive weekly gains on US stakes and China would hamper a deal to resolve its long-standing trade war. ()

The two sides will resume negotiations this week, with US President Donald Trump saying he can be extended on a March 1 deadline for a deal. Both reported progress in five days of talks in Beijing last week.

"It doesn't rule out a setback or two between now and early March," CBA analysts said in a note.

"Nevertheless, we still believe that both parties have good reasons to come to an agreement. And so motivated makes it an agreement more likely than not."

There are also growing expectations of more reflationary policies from some of the world's more powerful central banks.

The need for stimulus was highlighted on Monday with data showing a strong light in Singapore exports and a major decline in foreign orders for Japanese hardware products.

Beijing is already trading with China's banks that make the most possible New loan on record in January in an attempt to jump on slow investment.

Minutes of the Federal Reserve's last political meeting are due on Wednesday and should provide more guidance on the likelihood or not of interest rate increases this year. There is also talk that the bank will maintain a much larger balance than previously planned.

"Given the range of speakers since the January meeting that supports" patience ", the Fed protocols should repeat a dovish message altogether, say TD Securities analysts in a note.

A Fed officials roll call speaks at various events this week including a round table on Friday covering the future of the balance.

EYEING THE ECB

European Central Bank's Olli Rehn told a German newspaper on Sunday that recent data point to a weakening eurozone economy and interest rates will remain At current levels until monetary policy targets are met

There was a lot of speculation that the ECB would launch another round of targeted long-term refinancing operations (TLTRO) to support bank lending.

The risk of a light ECB saw the euro affect a three-month low on Friday before we jump on bad comments from Fed officials.

The only currency lined up to $ 1,1309 but remained t within the trading area 1.1213 / 1.1570 which has held since mid-October. The dollar was steady on the yen at 110.53 and had relied on a two-month peak of 111.12.

Sterling was a shadow firmer at $ 1,2909 ahead of Brexit talks between British Prime Minister Theresa May and EU Commission President Jean-Claude Juncker this week.

Anyone who left the $ 96,811 dollar on a basket of currencies, inching away from last week's top 97,368.

In the commodity markets, 0.28 percent strengthened to $ 1,324.70 per ounce.

Oil prices reached their highest for the year so far, buoyed by OPEC-led supply tensions and US sanctions against Iran and Venezuela. [O/R]

was up to 36 cents at $ 55.95 per barrel, while futures rose 20 cents to $ 66.45.


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