By Tomo Uetake
TOKYO (Reuters) – Asian stocks got higher on Monday, with a rise in Hong Kong market sentiment, as investors remained cautious in front of a carefully watched Federal Reserve meeting.
But the terrible trade conflict between the United States and China, as well as political tensions in the Middle East, kept the risk in check.
MSCI's widest index for Asia-Pacific stocks outside Japan increased by 0.1[ads1]% after the opening was weaker. Japan's average crossed up with a similar amount.
Asian markets gained a quick boost after Hong Kong jumped up to 1.4%. This weekend, the area leader Carrie Lam climbed down to a bill that would have handed over to China.
Hang Seng fell in three consecutive sessions last Friday, after the extradition bill triggered mass protests and some of the worst troubles seen on the territory since the UK handed it to Chinese rule in 1997.
"Last week The problem looked like Whether it would be another thorny point between the US and China, as the bill is being postponed indefinitely, it will probably be quiet, which is good for markets, says Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management.
Mainland Chinese stocks also strengthened, with the benchmark index up by 0.2% and the CSI 300 cubic item increasing by 0.2%.
US Secretary of State Mike Pompeo told Fox News on Sunday that President Donald Trump would resolve the issue of Hong Kong's human rights with China President Xi Jinping at a potential meeting between the two leaders at the G20 summit in Japan later this month
Wall Street shares ended lower on Friday as investors got stiff real before this week's Fed meeting, while a warning from Broadcom (NASDAQ 🙂 on slow demand weighed on chipmakers and added concerns in the US and China. ()
Investors are waiting for more clues from the Fed after policy makers increased expectations of a surcharge over the past few weeks.
Strong US retail data on Friday rolled back expectations of a Fed price swing this week's meeting at 21.7%, from 28.3% on Thursday, according to the CME Group's FedWatch tool. But during the July meeting, it will be easy to add a relief of 85%.
"The week ahead is likely to provide some clarification for investors on three fronts that have been uncertainties. The FOMC meeting with updated forecasts is central," said Marc Chandler, market democrat at Bannockburn Global Forex.
The manufacturing sector as well as the trade frictions in the US and China will also be closely monitored, Chandler said.
The financial markets were sidelined by a sudden rise in trade tensions in China and the US in early May, with growing concern among investors that a long-lasting standoff could tipping the world economy to recession
Geopolitical tensions in the Middle East increased a layer of uncertainty after the United States blamed Iran for attacks on two oil tankers in the Oman Gulf last week.
to temper some of the fears, and all eyes are on the Fed's two-day meeting starting on Tuesday.
Bank of Japan m ter also this week and is expected to strengthen its commitment to retain a massive stimulus program for a while to come.
The retail report also sent short dated US government bonds higher, flattening the yield curve. [L2N23L10H]
Benchmark 10-year notes were last at 2.091%, while two-year bond yields increased, spreading the spread between two- and 10-year yields to 23.6 basis points compared to more than 30 earlier this month.
A Reuters survey showed that an increasing number of economists expect Fed decision-makers to cut interest rates this year, although the majority still see it stick.
In the foreign exchange markets, it rose against a basket of six major currencies at 97,583 on Friday, the highest level for nearly two weeks after US retail data increased the fear that the world's largest economy is slowing down sharply.
The index last was 97,488, while the euro picked up $ 1,1222, near the lower end of the weekly trading area
The oil price rose on Monday after US Secretary of State Pompeo said Washington would take all necessary steps to ensure safe navigation in The Middle East, like tensions that are mounted after attack on tankers last week. [O/R]
futures increased 0.4% to $ 62.24 per barrel, while US Western Texas Intermediate (WTI) crude futures increased 0.3% to $ 52.66.
was slightly changed to $ 1,341.48 an ounce after hitting a 14-month peak on Friday.
skipped overnight at $ 9,391,85, the highest level in 13 months. It was last quoted at $ 9,104.64.