SYDNEY (Reuters) – Asian equities rose on Monday as signs of progress in the Sino-US trade gap led to rare optimism in a disappointing year for the region's equities.
FILE PHOTO: Men look at stock prices before a brokerage in Tokyo (Japan), December 5, 201
USA. President Donald Trump said he had a "very good reputation" with China's President Xi Jinping on Saturday to talk about trade, claiming "great progress" had been made.
Chinese state media were more cautious, saying Xi hoped the negotiating teams could meet halfway and reach an agreement that would be mutually beneficial.
The Wall Street Journal reported that the negotiators were working out a deal that could boost US exports and ease the regulations that stifle US companies in China.
MSCI's broadest index for Asia-Pacific equities outside Japan .MIAPJ0000PUS gained 0.2% in early trading, but declined 16% over the year. The Japanese Nikkei .N225 was shut down for a vacation that ended the year with a 12 percent loss.
Across the region, the Chinese blue chip index .CSI300 was the worst performer of the year, losing a quarter of its value. The only major black market this year was India, where BSE .BSESN was up almost 6 percent.
History was similar around the world, with the vast majority of major stock indices showing the red.
The S & P 500 .SPX accounted for nearly ten percent in December, the worst month since February 2009. That means a decline of 15 percent for the quarter and 7 percent for the year.
"Looking at the markets suggests that the global economy is in recession," said Robert Michele, chief investment officer and head of J.P.'s bond fund business. Morgan Asset Management.
"Although we agree that the global economy is in a downturn, we do not see any looming recession," he added, also because the Federal Reserve could offer a political cushion.
"A Fed commentary suggests that the three-year journey to normalize policy is nearing its end," argued Michele.
NO OTHER WALKING
Indeed, Fed Funds Futures <0#FF:> have largely priced in any increase for the coming year and now imply a quarter cut to mid-2020.
The Treasury believes that the Fed has come out of the US Treasury US2YT = RR traded on bonds. The yield on US Treasuries US2YT = RR fell from a peak of 2.977 percent in November to just 2.52 percent.
The $ 15.5 trillion market is at its biggest monthly rally in 2 1/2 years, according to a Bloomberg and Barclays index.
The steep decline in earnings has undermined the US dollar in recent weeks. It was on course against the currency basket .DXY at the end of December with a loss of 0.9 percent, but was still above the full year.
Compared to the yen, it also had a hard month with a loss of 2.8 percent and was last traded at 110.31 JPY =>. On the other hand, 2018 was a pretty stable year for the pair as it spent all of it in a narrow trading range from 104.55 to 114.54.
The euro ended the month with a firmer price of EUR 1,1439 =, but suffered losses of almost 5% in the course of the year so far.
This was a trivial move compared to oil prices in recent months, with Brent declining nearly 40 percent since its peak in October.
On Monday, the benchmark LCOc1 rose 14 cents to $ 53.35 a barrel, but declined 20 percent over the year. US commodity futures CLc1 rose 7 cents to $ 45.40.
Gold ended the year high after rising almost 5 percent to $ 1,279.26 per ounce last month.