The thawing of trade relations between the US and China drives up Asian stock markets and lowers the US dollar, although some investors see sensitive issues such as intellectual property and cybersecurity protection as a headwind for a sustained rally.
NIK, + 1.11%
opened by 1.3% and South Korea's Kospi
SEU, + 1
1.5% jumped out of the gate.
New Zealand's NZX-50
NZ50GR, + 0.70%
index rose 0.4% on Monday open, while the Australian S & P / ASX 200
XJO, + 1.27%
Benchmark rose 1.6% to make up for last week's losses. US equities rose before the close of trading on Friday before the meeting in Buenos Aires before the meeting between President Donald Trump and Chinese counterpart Xi Jinping, to discuss trade conflicts that have unsettled global markets.
The Dollar Dips from the 6-Month Low The New Zealand dollar was weaker against the Australian dollar, two currencies that are often seen as proxies to risk appetite. Australia's exports are closely linked to China's economy, in particular to the demand for natural resources such as iron ore that have supported industrial expansion. New Zealand delivers significant quantities of agricultural goods, including meat and dairy products, to China.
After a weekend of dinner between Trump and Xi in the group of 20 summit, the US postponed its threat to raise tariffs on Chinese goods worth $ 200 billion to 25%. of 10%. However, a timetable of about three months has been set in which the two sides should negotiate some of the issues that have been largely unsolvable in the past.
This led some market analysts to warn that a break in tensions with Australia and New Zealand could be temporary. A banking group suggesting an advantage for the US would be a 90-day window for exporting soybean culture from the main Republican States.
In addition, the US knows that China's national legislature usually hosts its annual meeting toward the end of March. That makes the timeline difficult for Xi because he does not want to give in to US trade demands, said Robert Rennie, Head of Financial Market Strategy at Westpac Banking Corp.
. "Risk appetite today may well be piqued and the risk assets could be in a rally," said Kyle Rodda, market analyst at IG Australia. He expects Asian stocks to be favored while the US dollar is sold, as rising risk tolerance goes hand in hand with a decline in US Treasury yields across the curve.
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