(Bloomberg) — Stocks rose as optimism built over progress in U.S.-China trade talks, while Treasuries edged lower. The dollar was little changed.
Equities traded higher across Asia and futures indicated gains for European and U.S. shares, with contracts on the S&P 500 Index breaking through the 200-day moving average for the first time since early December. Risk appetite was also helped by signs of a tentative deal among American lawmakers to avert a government shutdown. The yen dipped while the yuan pushed higher. Oil rebounded from a two-week low after Saudi Arabia pledged to deepen output cuts. The pound strengthened with Brexit talks on track for a March showdown in Brussels.
President Donald Trump said he’s open to extending a March 1 deadline to raise tariffs on Chinese products if the two sides are near an agreement, sending a conciliatory signal amid talks to resolve the trade war between the world’s two-biggest economies. U.S. lawmakers said they have reached an “agreement in principle” on border security funding that would forestall a second shutdown. While Trump expressed reservations about the border agreement, he said he’d consider the proposal.
The prospect of a deal to keep the U.S. government open together with hints that Trump may reach an accord with China appear to be rekindling the rally in riskier assets that has stalled after a stellar start to the year. A dovish shift by many of the world’s central banks has also helped, but at the same time has underscored worries about slowing global growth. South Korea on Wednesday saw its jobless rate climb more than forecast.
“None of the worries that people had in the fourth quarter have really gone away,” said John Carey, managing director and portfolio manager at Amundi Pioneer Asset Management. “But people are maybe a little less concerned now and a little bit more positive about the ability of the economy to continue in a growth trajectory over the next couple of years, and that should be good for earnings.”
Elsewhere, the New Zealand dollar surged after the central bank hinted at a less dovish policy path than many had expected.
Here are some key events coming up:
Chinese Vice Premier Liu He was expected to join U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in high-level trade talks Thursday and Friday.Earnings season continues with reports from companies including Cisco, Vivendi, Nvidia, Nestle, Coca-Cola and Credit Suisse.Sweden’s Riksbank is expected to keep interest rates at minus 0.25 percent after the first increase in more than seven years in December.Data Wednesday is expected to show U.S. consumer prices rose 0.1 percent in January, after falling 0.1 percent in December.
These are the main moves in markets:
The MSCI Asia Pacific Index rose 0.7 percent as of 4:20 p.m. in Tokyo.Japan’s Topix index advanced 1.1 percent at the close. Australia’s S&P/ASX 200 index fell 0.3 percent.Hong Kong’s Hang Seng Index gained 1.1 percent Shanghai Composite Index was up 1.8 percent.Futures on the S&P 500 rose 0.4 percent. The S&P 500 climbed 1.3 percent.Euro Stoxx 50 futures advanced 0.4 percent.
The yen slipped 0.2 percent to 110.66 per dollar. The offshore yuan rose 0.1 percent to 6.7648 per dollar. The kiwi rose 1.5 percent to 68.38 U.S. cents. The Bloomberg Dollar Spot Index was little changed.The euro bought $1.1328, little changed.The British pound was at $1.2909, up 0.1 percent.
The yield on 10-year Treasuries rose one basis point to 2.69 percent. Australia’s 10-year bond yield rose three basis points to 2.15 percent.
West Texas intermediate crude increased 0.9 percent to $53.55 a barrel.Gold rose 0.1 percent to $1,312.34 an ounce.
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