Asia stocks welcome trade talks, euro on defensive
24 July, 2019, 7:19 pm
SYDNEY (Reuters) – Asian shares on Wednesday gave a guarded welcome to hints of progress in the Sino-U.S. trade saga, while the dollar hit two-month highs on the euro as investors wagered on a dovish outcome from the European Central Bank’s coming policy meeting.
Sentiment had been helped by a Bloomberg report that U.S. Trade Representative Robert Lighthizer would travel to Shanghai next week for meetings with Chinese officials.
White House economic adviser Larry Kudlow on Tuesday called it a good sign and said he expected Beijing to start buying U.S. agriculture products soon.
Japan’s Nikkei added 0.5%, while Australian stocks rose 0.8% to all-time highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.4% and Chinese blue chips climbed 1.2%.
Not so welcome was news the U.S. Justice Department was opening an antitrust investigation of major digital tech firms and possible anticompetitive practices.
The DoJ cited concerns about “search, social media, and some retail services online” — an apparent reference to Alphabet Inc, Amazon.com Inc and Facebook Inc.
Facebook reports results on Wednesday and Amazon and Alphabet on Thursday.
Nasdaq futures fell 0.2% in Asian trade, while E-Mini futures for the S&P 500 eased 0.1%.
The news took a little of the gloss off a solid overnight session for Wall Street, where upbeat quarterly reports from Coca-Cola and United Technologies helped ease some concerns about earnings.
The Dow had ended Tuesday up 0.65%, while the S&P 500 gained 0.68% and the Nasdaq 0.58%.
Stocks are just a whisker away from all-time highs buoyed by expectations of a wave of policy stimulus by global central banks and a resulting sharp decline in bond yields.
The ECB is thought likely to at least offer a nod to easier policy at its meeting on Thursday.
Futures remain 100% priced for a rate cut of 25 basis points from the Federal Reserve next week, and even imply an 18% chance of 50 basis points.