Asian stocks rally as China's factory jump lifts trust By Reuters
© Reuters. FILE PHOTO: A videographer films an electronic card showing Japan's Nikkei average and associated indexes on the Tokyo Stock Exchange in Tokyo By Shinichi Saoshiro
TOKYO (Reuters) – Asian stocks drove higher on Monday as positive Chinese factory meters and signs Progress in Chinese-US trade negotiations increased the feeling, even though another defeat for British Prime Minister Theresa Bay's Brexit agreement increased to sterling accidents.
Spreadbetters expects European stocks to open higher, with Britain's rising 0.4 percent, Germany increasing 0.8 percent and
MSCI's widest index for Asia Pacific outside Japan increased by 1[ads1] percent and rallied 2.4 percent.
Australian equities rose 0.6 percent, South Korea increased 1.3 percent and Japan's advanced 1.4 percent.
The markets took heart after China's official purchasing manager index (PMI) released on Sunday showed that factory activity unexpectedly grew for the Christmas season in four months in March.
A private company survey, Caixin / Markit PMI, released on Monday, also showed the industry sector in the world's second largest economy that returned to growth.
If maintained, the improvement in business conditions may indicate that production is heading towards recovery, which causes fear that China may enter into a sharper economic downturn.
"Our opinion is that the impact of political relaxation is gradually kicking in, pushing sequential growth indicators like PMI first," wrote Chinese economists at Bank of America Merrill Lynch (NYSE :).
"In particular, the larger-than-expected tax and levy slumps and improved economic conditions have probably helped boost business sentiment in the production area."
Shares in Asia also took their signals from Wall Street, with the posting their best quarterly gains in a decade. on Friday among trade optimism. ()
The United States and China said they made progress in the trade negotiations that were concluded on Friday in Beijing. Washington said the talks were "honest and constructive" as the world's two largest economies attempt to resolve their drawn-out trade war.
"The ongoing trade dispute between the United States and China has given a steady stream of conflicting signals to the markets. But overall, negotiations are reaching a conclusion," said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management.
"Hope that the United States and China will reach a trade agreement as early as this month, allowing stocks to start the quarter on a positive note."
In the foreign exchange market, against a basket of six major currencies, 97,147 stood at as high as 97,341 on Friday, the strongest since March 11.
The Greenback had benefited from the flag pound, which was on its way to lay its fourth day of loss in the wake of the ongoing Brexit saga.
Sterling took its last blow after British lawmakers rejected Prime Minister May & # 39; s Brexit deal for a third time on Friday, beating the likely deadlock and leaving the country's withdrawal from the EU deeper into turmoil.
Pound crept up 0.15 percent to $ 1.3055 after posting three sessions of loss.
The Australian dollar developed 0.35 percent to $ 0.7122. It is sensitive to changes in the economic outlook for China, its main trading partner.
The euro rose 0.2 percent to USD 1.11239 while the dollar rose 0.2 percent to 111.035 yen.
Safe Harbor government bonds withdrew as risk aversion
The benchmark stood at a six-day high of 2,444 percent, and withdrew from a 15-month low of 2,340 percent brushed on March 25.
Treasury's 10-year return had fallen as the Federal Reserve stopped its drive to climb rates and as risk aversion, driven by concerns about a global economic downturn, seized financial markets towards the end of March.
The slide had pushed 10-year returns below the three-month rate for the first time since 2007 late last month.
This phenomenon – when the spread between short and long-term yields becomes negative – is called a curve inversion and has preceded every American recession over the past 50 years.
3-month / 10-year return spread has since retreated from negative territory and stood around 3 basis points.
Prices added to Friday's gains, with US futures in the West Texas Intermediate (WTI) at 0.6 percent to $ 60.52 per barrel.
Oil prices gave their biggest quarterly increase in decades during January-March, when US sanctions against Iran and Venezuela also overshadowed OPEC-led supply reductions over concerns over a weakening global economy. [O/R]
