Stocks in Asia looked set for modest gains as investors parsed details of the U.S.-China phase one trade deal. U.S. equities eked out new all-time highs and Treasuries rose.
Australian shares opened higher, with futures higher in Japan and Hong Kong. The S&P 500 Index climbed as investors took solace from an easing of tensions between the world’s two largest economies, though ended the session off its high. Soybeans slumped after China signaled purchases would be demand based. The dollar dipped and Treasury yields retreated.
The deal commits China to do more to crack down on the theft of American technology and corporate secrets by its companies and state entities. It also binds Beijing to avoid currency manipulation to gain an advantage and includes an enforcement system to ensure promises are kept.
“A lot of the trade deal has been priced into markets already,” Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute Inc., told Bloomberg TV. “It represents that the U.S. and China can come to an agreement and that is no small feat and a very important first step.”
Elsewhere, Russia’s ruble fluctuated. President Vladimir Putin replaced his long-serving prime minister and called for sweeping constitutional changes, fueling speculation that the Russian leader is moving to extend his grip on power beyond the end of his term in 2024. Oil drifted, with West Texas Intermediate crude trading around $58 a barrel.
Here are some events to watch for this week:
- Earnings season has begun in the U.S., with reports from Morgan Stanley and Bank of New York Mellon Corp. due Thursday
- China GDP, along with key monthly data for December, come on Friday.
- A final reading on the euro-zone’s December inflation is also due on Friday.
There are some of the main moves in markets:
- Futures on the S&P 500 Index climbed 0.1% as of 8:06 a.m. in Tokyo. The underlying gauge rose 0.2% on Wednesday.
- Futures on Japan’s Nikkei 225 added 0.1%.
- Hang Seng futures earlier gained 0.2%.
- Australia’s S&P/ASX 200 Index advanced 0.3%.
- The yen was at 109.90 per dollar, little changed.
- The offshore yuan was steady at 6.8913 per dollar.
- The Bloomberg Dollar Spot Index slid 0.1%.
- The euro bought $1.1152, little changed.
- The yield on 10-year Treasuries dropped three basis points to 1.78%.
- Australia’s 10-year yield slid four basis points to 1.17%.
- West Texas Intermediate crude oil added 0.5% to $58.10 a barrel.
- Gold was steady at $1,555.63 an ounce.
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