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 broadest index for Asia-Pacific stocks outside Japan rose 0.9 percent, largely recovering from a sharp fall in Friday.
Japan climbed 1[ads1].8 percent to this year's highest level so far, while Shanghai bluebells stood at 2.1 percent.
E-Mini futures for the flat that were thinned by a vacation in US markets, while spreading the spate into a firmer opening for European bars.
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 bouncing bold comments from Fed officials.
The only currency increased 0.2 percent on Monday to 1.11312 do but it was still well within the trading area 1.1213 / 1.1570 which has remained since mid-October.
The dollar was steady on the yen at 110.53, having supported away from a two month peak of 111.12.
Sterling was a shadow firmer at $ 1,2913 ahead of Brexit talks between British Prime Minister Theresa May and EU Commission President Jean-Claude Juncker this week.
Anyone who left the dollar down to 96,765 on a basket of currencies and away from last week's peak of 97,368.
In commodity markets, dollar operations contributed to 0.2 percent to $ 1.323.56 per ounce.
Oil prices peaked for the year, so far away from OPEC-led supply cuts and US sanctions against Iran and Venezuela. [O/R]
was up to 25 cents at $ 55.84 per barrel, while futures rose 5 cents to $ 66.30.