© Reuters. A Passerby Passes Stock Exchange in Tokyo
By Swati Pandey
SYDNEY (Reuters) – Asian equities rallied on Monday, reaching a three-month high as risk assets hunted down hopes for a trade agreement between the US and China already next month, while the US dollar plays a key role in interest rate decisions.
In early Asian trading, MSCI's broadest index of Asian Pacific equities outside Japan () gained 0.3%. for its third consecutive day at 51
Chinese stocks gained some strength, with the CSI 300 () up 0.2%. Hong Kong's Hang Seng Index () rose 0.7%, while Australian equities gained 0.1%.
The Japanese Nikkei () was also optimistic and rose 0.3% to a high for the year.
The gains came after a positive session in the US and European markets on Friday.
United States. and Chinese officials "on the brink of completion of some parts of a trade agreement after high-level telephone discussions on Friday, US Commerce Representative Office and Chinese Ministry of Commerce said talks will continue.
President Donald Trump hopes to sign a treaty with China's President Xi Jinping at a summit in Chile next month.
The protracted trade war between the world's largest economies has affected manufacturing activity, exports and business confidence worldwide, and has affected the profits of many large industrial companies.
The optimism that Beijing and Washington were about to settle their dispute led the S & P500 () to outperform its July 26, 2005 record of 3,025.86, even though it ended a tad below that level on Friday , The S & P 500's Total Return Index () recorded an all-time high.
E-Mini-Futures for the S & P 500 () started on Monday with a gain of 0.1%.
Strong results from companies like Intel (O 🙂 also boosted sentiment in the stock markets. More than 81% of US companies have surpassed Wall Street expectations in this winning season despite concerns over the trade war.
Investors now expect earnings from companies such as Alphabet Inc (O :), Apple (O :), Facebook (O 🙂 and Exxon (N :).
Activity over the week is dominated by the US Federal Reserve, which markets expect to cut interest rates at its Wednesday meeting.
The Bank of Japan meets on Thursday. Indicators for Chinese and US manufacturing will be released on Friday.
"The outcome of the FOMC Policy Meeting is likely to generate the largest market response," said Richard Grace, Sydney-based Commonwealth Bank's currencies major currencies strategist.
"We also believe that the risk is that the FOMC will take a break," Grace added.
"This means that the 27.6% for a further 25 basis point cut in December will quickly fade and bring the US to its knees." Yields and USD higher. "
In currencies, the () was slightly firmer at 97.866 versus a basket of six major currencies, with the Japanese yen dropping 0.1% to hit 108.75.
Previously, sources told Reuters the 27 EU countries that joined after the Brexit in remain hopeful of reaching an agreement on Monday to postpone the divorce of the UK by 31 January with early departure.
The Euro () has also flouted $ 1,1077.
"It feels like the calm before a possible storm, where the event risk intensifies with political twists, key economic data and key factors in bank meetings, "said Chris Weston, Sydney-based strategist at Pepperstone.
The oil price eased after strong gains in the past week.
(This story corrects Nikkei's milestone in bullets and paragraph 4 to a year high, not a decade high.)