SYDNEY (Reuters) – Asian stock markets plummeted on Monday as investors dared to hope for both advances in Sino-U's trading in Washington this week and more political stimulus from major central banks.
A man looks in front of an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu Province, China February 13, 2019. REUTERS / Stringer ATTENTION EDITORS – THIS PICTURE IS PROVIDED BY A THIRD PARTY. CHINA OUT.
MSCI's widest index of Asia-Pacific shares outside Japan rose 0.9 percent, largely recovered from a sharp fall in Friday.
Japan's Nikkei climbed 1.8 percent to this year's highest level so far, while the Shanghai blue chips went up 2.1 percent.
E-Mini futures for the S & P 500 were flat as trading thinned by a vacation in US markets, while spreadbetters pointed to a firmer opening for European bursaries.
Dow and Nasdaq had boasted their eighth consecutive weekly gains on US stakes and China would hamper a deal to settle their long-standing trade war. [.N]
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.
"Still, we still believe that both parties have good reasons to come to an agreement. And so motivated, it makes a deal more likely than not."
There are also growing expectations of more reflationary policies from some of the world's most 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 to make the most new loans 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 spectrum of speakers since the January meeting, which supports" patience ", Fed minutes should repeat a skilled message," TD Securities analysts said in a note.
A Fed call by Fed officials speaks on various events this week, including a Friday round table covering the future of the balance. [FED/DIARY]
EYEING THE ECB
The 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 loans.
The risk for a single ECB saw the euro affect a three-month low on Friday before bouncing bold comments from Fed officials.
The only currency rose 0.2 percent on Monday to $ 1.11312, but it was still well within the 1.1213 / 1.1570 trading area which has held since mid-October.
The dollar was steady on the yen at 110.53 and had relied on a two-month peak at 111.12.
Sterling was a shadow firmer at $ 1,2913 before 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 top 97,368.
In commodity markets, dollar operations helped to spot gold at 0.2 percent to $ 1,323.56 per ounce.
The oil price was highest for the year to date, performed by OPEC-led supply cuts and US sanctions against Iran and Venezuela. [O/R]
U.S. Raw was 25 cents at $ 55.84 a barrel, while Brent Raw futures rose 5 cents to $ 66.30.
Editing by Sam Holmes & Kim Coghill