TOKYO (Reuters) – US oil futures hit six weeks lows on expectations that large producers could ease yield limits on Monday, while Asian equities and US equity futures picked up. The United States and North Korea were still working on a summit.
The euro rallied from a 6-1 / 2-month low to the Italian President rejected a eurosceptic as an important minister of economic affairs, but his actions were seen as triggering a possible constitutional crisis and opened up the prospect of new elections, leaving the single currency unstable.
The oil price extended its decline from last week amid growing expectations that large oil producers could ease their 17-month production cuts.
A return to oil production levels introduced in October 2016, the basis for the current deal to curb production, is one of the options for easing curbs, Russia's Energy Minister said on Saturday.
His comments came after Russia's and Saudi Arabia's energy ministers met in the run-up to an important OPEC meeting in Vienna next month to review global oil supply conditions.
Brent crude oil futures fell as much as 2.6 percent to $ 74.49 a barrel, the lowest level in about three weeks. They last at $ 75.00, down 1.8 percent.
U.S. Crude oil futures fell to a six-week low of $ 65.80 a barrel, down 3.1 percent.
U.S. S & P500 mini futures rose 0.4 percent in Asian trading, but market holidays in the world's two largest financial centers – London and New York – could make trading slow and illiquid for the day.
South Korea's KOSPI gained 0.7 percent, buoyed by stocks that benefit from further thawing tension with Pyongyang.
MSCI's broadest index for Asia-Pacific equities outside Japan rose 0.2 percent. Japan's Nikkei lost steam to trade flat and the broader Topix fell 0.2 percent.
President Donald Trump said Sunday that a US team had arrived in North Korea to prepare for a planned summit between him and North Korean leader Kim Jong Un, which Trump withdrew from a re-examination last week.
"While we can not say for sure how much they can agree, both sides seem to want to progress," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
Mizuho sees a 10 percent chance that the summit planned so far on June 12 will not take place, a 20 percent chance of a ceasefire and a 70 percent chance that the summit will lead to more talks without He said that he is conducting immediate negotiations on denuclearization.
In the foreign exchange market, the euro gained 0.5 percent to $ 1.1705, having reached a 6½-month low of $ 1.1646 on Friday.
Italian President Sergio Mattarella declined an Eurosceptic election for the key ministry of economics sought by the two anti-establishment parties to form a coalition government, the 5-Star Movement and the League.
While his decision appeased the immediate concern for a Eurosceptic minister in the eurozone's third largest economy, his move caused greater uncertainty than the 5-star leader Luigi Di Maio, whose party won most seats in an inconclusive March 4 vote won. demanded that the Parliament accuse Mattarella.
The 10-year Italian bond yield has risen 67 bps or 0.67 percentage points this month and is expected to record its largest monthly increase since the end of 2011.
The yield spread over benchmark Bunds rose over 200 basis points for the first time in more than a year.
"If Italian debt prices continue to fall, people will have to do more hedging, say, by selling the Euro, etc. The theme will be the biggest focus for the markets this week."
While nobody Thinking that the country will fail, people will have to hedge when exposed to sharp price movements, "said Takafumi Yamawaki, head of monetary and bond research at JP Morgan Securities in Tokyo.
Investors are also increasingly skeptical in Spain – Prime Minister Mariano Rajoy is increasingly pressured to resign in the face of a graft case in which his party is involved.
Spanish-German debt-to-GDP spreads increased to around 105 basis points, the highest level since January.
"The euro will be bought back in the near future, but looks like $ 1.17. But we have not experienced the kind of panic we experienced before the French presidential election last year. I would bet that the euro will gradually slip as if it falls sharply, "said Kyosuke Suzuki, director of forex at Societe Generale.
The dollar rose 0.1 percent against the yen in early Monday trading to 109 , 44 yen, and extended its rebound on Thursday, the 108.955, on optimism towards the upcoming US-North Korea Summit.
Elsewhere, Bitcoin traded at $ 7,370 and flirted with its 365-day moving average, which stood at $ 7,360  Cut by Kim Coghill and Jacqueline Wong