(Bloomberg) — Asian stocks traded mixed as investors waited to see whether the outcome of fresh talks on trade will be productive. The yen advanced and Treasuries consolidated.
Stocks advanced in Japan and Australia, though slipped in Hong Kong and Shanghai. The Trump administration expressed optimism it can reach a “reasonable” trade deal with China as President Xi Jinping dispatched one of his top aides to negotiations in Beijing. U.S. futures ticked higher. The dollar was steady against major G-10 peers and 10-year Treasury yields edged lower.
Investors remain in a quandary after the wild end to 2018, in which the S&P 500 lost more than 9 percent in a month. Powell’s comments on Friday and China’s moves to shore up its economy have lifted sentiment somewhat, but risks remain. The outcome of trade negotiations still hangs in the balance and the Fed policy outlook continues to be debated. Meanwhile, U.S. lawmakers are still unable to reach agreement on a budget, leaving parts of the federal government shut down for a third week.
“Investors are happy to go with the positive trend in the current environment but remain wary of sharp downside reactions given the moves we’ve seen over the last few weeks and months,” Nick Twidale, chief operating officer at Rakuten Securities Australia, told clients in a note. “Traders are still very much aware that the various geo-political factors that have been so prevalent in influencing market moves over the last twelve months are still relevant.”
In Monday’s session on Wall Street, Amazon.com Inc. jumped 3.4 percent, pushing its market cap to $797 billion and surpassing Microsoft Corp. as the world’s largest public company.
Elsewhere, crude oil held gains after rising for a sixth consecutive session to the highest in three weeks.
Here are some events investors may focus on this week:
A U.S. delegation is in Beijing for trade talks with Chinese officials, the first face-to-face encounter since Trump and Xi agreed to a temporary truce on Dec. 1.North Korea’s Kim Jong Un is visiting China ahead of a potential summit with President Donald Trump.Wednesday sees the release of minutes from the Fed’s Dec. 18-19 policy meeting. Powell will speak to the Economic Club of Washington D.C. on Thursday.Britain’s Parliament resumes a debate on the Brexit withdrawal bill, with Prime Minister Theresa May seeking to avoid defeat in a vote set for the week of Jan. 14.
These are the main moves in markets:
Japan’s Topix index added 0.4 percent as of 10:40 a.m. in Tokyo.Australia’s S&P/ASX 200 Index rose 0.5 percent. South Korea’s Kospi index was little changed. Hong Kong’s Hang Seng Index fell 0.5 percent.Shanghai Composite Index lost 0.4 percent. S&P 500 futures rose 0.2 percent. The S&P 500 rose 0.7 percent. The MSCI Asia Pacific Index was little changed.
The yen gained 0.2 percent to 108.54 per dollar.The offshore yuan traded at 6.8502 per dollar.The Bloomberg Dollar Spot Index was flat.The euro traded at $1.1458, down 0.1 percent. The pound was at $1.2773.
The yield on 10-year Treasuries held just under 2.69 percent.Australia’s 10-year bond yield added four basis points to 2.31 percent.
West Texas Intermediate crude traded at $48.53 a barrel.Gold fell 0.2 percent to $1,286.99 an ounce.
–With assistance from Reade Pickert and Sarah Ponczek.
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