By Swati Pandey
SYDNEY (Reuters) – Asian stocks on Monday extended the gain to hit a three-month high when risky parts hit a flap from hopes of a US trade deal and China as soon as next month while the dollar marked time as the focus shifts to a US exchange rate decision.
In early Asian trades, MSCI's broadest index of Asia-Pacific shares outside Japan () fell 0.3% for the third straight gain day to 51[ads1]8.29, the highest since the end of July.
Chinese stocks were a bit firmer with blue-chip CSI 300 () up 0.2%. Hong Kong's Hang Seng Index () jumped 0.7% while Australian stocks climbed 0.1%.
Japanese Nikkei () was also rising, rising 0.3% to a one-year high.
The gains came after a positive session in US and European markets on Friday.
U.S. and Chinese officials are "close to completing" some parts of a trade deal after high-level phone calls Friday, the US Commerce Representative's Office and China's Commerce Department said with talks to continue.
U.S. President Donald Trump has said he hopes to sign the agreement with China's President Xi Jinping next month at a summit in Chile.
The protracted trade war between the world's largest economies has harmed manufacturing activity, exports and business confidence globally, while diminishing the profits of many large industrial companies.
The optimism that Beijing and Washington were finally close to resolving the conflict led to the S & P500 () surpassing the July 26 closing record of 3,025.86, although it fell slightly below that level on Friday. The S&P 500's total return index () was a highlight of all time.
E-mini futures for the S&P 500 () started on Monday, up 0.1%.
Strong performance from companies including Intel (O 🙂 also increased the mood in the stock markets. More than 81% of US companies have beaten Wall Street expectations so far this revenue season despite concerns about the trade war.
Investors then expect revenue from such as Alphabet Inc (O :), Apple (O :), Facebook (O 🙂 and Exxon (N :).
The activity later this week will be dominated by the US central bank, which markets expect is sure to lower interest rates at Wednesday's meeting.
Bank of Japan meets on Thursday. On Friday, indicators for Chinese and American production will be released.
"The outcome of the FOMC political meeting is likely to draw the biggest market reaction," said Richard Grace, Sydney-based chief currency strategist at Commonwealth Bank.
"We also think the risk is that the FOMC will articulate a break," for future decisions, Grace added.
"That means that 27.6% pricing for a further 25 bps cut in December will quickly evaporate, sending US yields and USD higher." six main currencies. The Japanese yen was 0.1% lower at 108.75.
The European Union agreed to London's request for an extension of the Brexit deadline, but set no new departure date. This gave Britain's split parliament time to decide Prime Minister Boris Johnson's call for a snap election.
Earlier, sources told Reuters the 27 EU countries that will be back after Brexit hope to agree on Monday to postpone Britain's divorce to January 31. with an earlier departure possible.
Euro () also dropped water to $ 1.1077.
"It feels like calm before a potential storm, where the risk of events heats up with political twists, important financial data and central bank meetings," said Chris Weston, Sydney-based strategist at Pepperstone.
Oil prices eased after strong gains last week.
(This story corrects Nikkei's milestone in bullet and section 4 to one year high, not decade high)