Asia shares inch up, fatigue curbs dollar

SYDNEY (Reuters) – Asian stocks were cautiously higher on Monday as opposed to contradictory signals about the possibility of a ceasefire in the trade convention between Chinese and American trade while the Federal Reserve's newly discovered concern for the global economy undermined the dollar.

A man passes an electronic stock card outside of a brokerage in Tokyo, Japan, November 1[ads1]3, 2018. REUTERS / Toru Hanai

MSCI's largest Asia Pacific stocks outside Japan reached 0.1 percent and Chinese blues 0.5 percent.

Japan's Nikkei got 0.4 percent, but the E-Mini futures for the S & P 500 fell 0.3 percent.

Wall Street had strengthened Friday after US President Donald Trump said he could not charge more tariffs on Chinese goods after Beijing sent a list of measures it was willing to take to resolve trade tensions.

The comment argued speculation about an agreement when Trump meets Chinese President Xi Jinping on the sidelines of a G20 summit in Argentina later this month.

Sino-U.S tensions were apparently shown at an APEC meeting in Papua New Guinea this weekend, where leaders failed to agree on a communique for the first time ever.

U.S .. Vice President Mike Pence said in a blunt speech that there would be no end to US $ 250 billion of Chinese goods before China changed.

"Trump's comments were seen as a glimpse of the hope that further tariff actions could be jeopardized," said NAB's head of FX strategy, Ray Attrill.

"The exchange of barbs between Pence and Chinese President Xi Jinping in PNG this weekend continues to suggest that this is unlikely."


Also uncertain was the view of US interest rates.

Federal government policies are still signaling increases in the future, but it is also more concerned with a potential global slowdown, which means that markets suspect that the tightening cycle may not have much longer to run.

"Fed officials have a lighter time showing a slightly less Hawaiian leaning by noting the emerging global decline," said Deutsche Bank's macro strategy Alan Ruskin.

"It underestimate expectations of interest rate increases that move over" neutral "," as the Fed has nominated between 2.5 and 3 percent. "This shift tone is subtle, but fits with the more bullish bond market tone too late and begins to have a significant impact on the dollar."

It will focus attention on a look of New York's Fed President John Williams later on Monday to see if he echoes the same theme.

Investors have already expanded the odds of further hiking, with a December movement now priced at 73 percent, down from over 90 percent. Futures imply prices around 2.74 percent by the end of next year, compared to 2.93 percent early in the month. <0#FF:>

The yield on US 10-year paper has significantly decreased to 3.06 percent, from a last peak of 3.25 percent.

The dollar followed to reach 96,441 against a basket of currencies, down from a peak of 97,693. The euro was $ 1,1414, while the dollar supported 112.66 yen.

Sterling remains vulnerable to $ 1,2833 after political unrest over Brexit caused steep losses last week.

The British Prime Minister Theresa May said on Sunday her cover would risk delaying Brexit as she faced the opportunity for a leadership challenge from her own party.

With both pro-EU and pro-Brexit legislators unhappy with the draft agreement, it is not clear that she will be able to win Parliament's backing and increase the risk of Britain leaving the EU without a deal.

PHOTO PHOTO: An American five-dollar note is seen in this illustration photo, June 1, 2017. REUTERS / Thomas White / Illustration / Filfoto

In the commodity markets, gold found support from the dollar fall and held company at $ 1,1221.92 .

Oil prices had a loss last week last week, but have found some help from the expectations. The organization of the petroleum exporting countries would reduce production.

Brent crude was up 72 cents at $ 67.48 per barrel, while US crude gained 76 cents to $ 57.22.

Editing Shri Navaratnam

Our Standards: Thomson Reuters Trust Principles.

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