© Reuters. FILE PHOTO: A Videographer Is Filming an Electronic Tablet Showing the Japanese Nikkei Average and Related Indexes on the Tokyo Stock Exchange
By Shinichi Saoshiro
TOKYO (Reuters) – Asian equities hit positive Chinese factory values on Monday Sentiment was showing signs of progress in trade talks between China and the US, even though British Prime Minister Theresa May's Brexit deal weighed on the pound sterling's further defeat.
Spreadbetters expected European equities to gain 0.4%, rising by 0.9%.
The broadest MSCI index for Asia-Pacific outside Japan increased 1
Australian equities gained 0.6 percent, South Korea 1.3 percent and Japan 1.4 percent.
Markets aroused a heart as China's official PMI, released Sunday, showed unexpected growth in factory activity for the first time in four months in March.
Caixin / Markit PMI, a private business survey published Monday, also showed that the manufacturing sector in the world's second largest economy is returning to growth.
If business conditions improve sustainably, this could point to a recovery in the industry, easing fears that China will be in a stronger economic downturn.
"In our view, policy easing is starting to have an impact on sequential growth indicators such as the PMI," wrote American economist Merrill Lynch (NYSE :).
"In particular, higher-than-expected tax and fee cuts and improving financial conditions have probably helped boost the manufacturing business climate."
Asian equities also fell on Wall Street. On Friday, optimistic trading posted the best quarterly profit in a decade. ()
The United States and China stated that they had advanced the negotiations in Beijing on Friday. Washington said the talks are "open and constructive" as the world's two largest economies seek to resolve their protracted trade war.
"The continuing trade dispute between the US and China has created a steady stream of conflicting signals for the markets, but negotiations appear to be closing overall," said Soichiro Monji, chief strategist of Sumitomo Mitsui DS Asset Management
"Hopes that the United States and China will reach an agreement on trading as early as this month, equities make a positive start to the quarter."
There are six stocks in the foreign exchange market The main currencies were at 97.147, after reaching 97.341 on Friday, their highest level since March 11th.
The greenback had benefited from the dwindling pound that was on its way to recording its fourth consecutive day of continued Brexit saga.
The recent slap against Sterling fell on Friday when UK lawmakers rejected Prime Minister May's third Brexit deal for the third time. He had his probable death blow and let the country's withdrawal from the European Union into turmoil.
The pound rose 0.15 percent to $ 1.305 after three losses.
The Australian dollar rose 0.35 percent to $ 0.7122. The China is sensitive to shifts in the economic outlook for China, the country's main trading partner.
The Euro rose 0.2 percent to $ 1,1239, while the Dollar rose 0.2 percent to 111,035 yen.
Secured government bonds eased as risk aversion eased in broader markets.
The benchmark climbed to a six-day high of 2.444 percent, falling from a 15-month low of 2.340 percent on March 25.
The Treasury's 10-year yield had fallen As the Federal Reserve halted its rate hike efforts and risk aversion, fueled by concerns over a global slowdown, shook financial markets in late March.
The decline had pushed the 10-year rate below the three-month rate for the first time since late last month.
This phenomenon – when the spread between short- and long-term returns becomes negative – is known as curve inversion and has preceded any US recession in the past 50 years.
The three-month / 10-year yield spread has since retreated from negative territory to around 3 basis points.
Prices rose on Friday, and West-West Intermediates (WTI) futures rose 0.6 percent to $ 60.52 a barrel.
Oil prices recorded their strongest quarterly rise in a decade in January-March, as did US sanctions on Iran and Venezuela OPEC's supply cuts overshadowed concern over a slowing global economy. [O/R]