Global stocks climb on trade, rate cut optimism; yuan falters by reuters

© Reuters. FILE PHOTO: People Going in Front of Table Showing Stock Indices in Tokyo

By Hideyuki Sano and Noah Sin

TOKYO / HONG KONG (Reuters) – Asian stocks, European and US stock futures rose on Monday after the US stopped planning to impose tariffs in Mexico, and as global investors hoped for lower US interest rates due to lack of job data.

Global investors had feared opening another trade conflict while still struggling with China, tipping the US and other economies into recession. The Mexican peso rallied more than 2% on Monday.

But in China, the yuan ended its weakest this year after the country's imports fell most in nearly three years, and as negotiations to end Sino-US.

On the stock market, European futures pointed to a higher transparency. The Pan region increased by 0.4%, London's futures increased by 0.5% and German reached 0.6%.

Previously, S & P500 mini futures increased as much as 0.8% and were up 0.3%. The 1[ads1]0-year US government bond yield was seen at 2.1223 percent, having had a 21-month low of 2.053 percent on Friday on soft US job data.

In Asia, Tokyo was 1%, while the MSCI Asia-Pacific equities index outside Japan rose to 1%, led by strong gains in Hong Kong and Indonesia.

The improved risk feeling also helped lift the dollar against the yen 0.4% to 108.64.

"The deal with Mexico increases the mood while expectations of US interest rate cuts will also support stock prices," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

"Yet, with limited progress so far in US and China trade negotiations, The most important question for markets is that stock prices could only increase, "he added.

Pictet Wealth Management said in a Monday context that it has moved to a" tactical underweight "attitude to global equities, referring to" increased valuations, mixed economic data and increasing trade tensions ".

T Hedes safety note was driven home by Chinese data Monday morning, and imports in May were 8.5% from the previous year, a much worse than expected outcome that signaled weak domestic consumption.

Exports increased unexpectedly 1.1% last month, although many suspect that inflation is related to frontloading of shipments from companies to avoid to higher US rates.

In the United States, the expectations of the Federal Reserve will reduce rates held dollar by defensive following a weak US work report.

Wages for wages increased by 75,000 jobs last month, much less than the 185,000 supplements estimated by economists in a Reuters survey.

Wage growth, carefully monitored for the impact on inflation, cooled to 3.1 percent from a year earlier, the slow annual increase since September. Only three months earlier, wages had increased at the highest rate in a decade.

The Fed Fund's foreign exchange forward prices, down on Monday after the Mexico agreement, were still pricing for more than two 25 basis point reductions at the end of this year, with a nearly full price in July.

"I expect optimism to rule markets to the next Fed meeting," said Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset Management.

The Federal Reserve next policy meeting is set for next week, 18-19. June.

The euro was down almost 0.3% against the $ 1.11301 dollar near a 2-1 / 2-month $ 1.11347 raise on Friday.

Gold sank nearly 1%, having hit a 14-month high of $ 1,348.1 per ounce on Friday, close to a major opposition of around $ 1,350.

The yuan softens after China's weak may import data, and after the country's central bank chief said last week there was no particular "numeric number" that was more important than another when asked if it was a red line for Beijing.

"Recent comments from current and former central bank governors suggest a consensus is building among Chinese policemen that they do not attach great importance to defending seven per dollar," said Ei Kaku, currency strategy at Nomura Securities.

0.35% to as low as 6.9366 per dollar, the weakest since early December, when Trump last met Chinese President Xi Jinping for trade talks.

It was last seen at 6,9502 per dollar, after hit a seven month low at 6,99619 on Friday.

"The yuan would weaken further if there were no summit meeting rooms between the two countries at a forthcoming G20 meeting in Osaka," says Nomura Kaku.

Many investors still cling to hopes that Trump will meet Xi on the sidelines of the 20-leader meeting at the end of the month to seek a trade and other financial compromise.

The meeting has some parallels with the Buenos Aires Summit in December of December, postponing a wage increase, said Secretary of State Steven Mnuchin on Saturday.

G20 financial leaders on Sunday recognized "intensified" trade tensions risk global growth, but do not call for a US-China dispute settlement.

Oil price widened gains after Saudi Arabia said on Friday OPEC and non-Russia were close to agreeing to expand a production cut through June and as Wall Street rallied.

futures rose nearly 0.4% to $ 63.51 per barrel while futures achieved 0.4% to $ 54.22.

Source link

Back to top button