Asia stocks cheer trade truce, bonds retreat

Asia stocks cheer trade truce, bonds retreat

Reuters  | Jul 01, 2019 15:43

U.S.-China trade truce pushes global stocks higher

By David Randall

NEW YORK (Reuters) - Global stocks rallied and bonds retreated on Monday as the United States and China agreed to restart trade talks at the G20 summit over the weekend, leading investors to bet that a breakthrough between the world's two largest economies would jumpstart global economic growth.

The United States and China agreed on Saturday to resume trade negotiations after U.S. President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met at the sidelines of the Group of 20 summit in Japan.

Those included no new tariffs and an easing of restrictions on tech company Huawei. China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.

"It played out as well as possible," said Hans Peterson, SEB Investment Management's global head of asset allocation. "It gives us time to digest and get a bit better activity in the global economy."

Broad gains in Europe and Japan and fresh record highs in the U.S. market pushed MSCI's broadest global index (MIWD00000PUS) up 0.3%, adding to a rally that has been one of the global stock market's best first halves to a year ever. The benchmark S&P 500 index surpassed its previous record high of 2,964.15, hit on June 21.

On Wall Street, the Dow Jones Industrial Average (DJI) rose 178.83 points, or 0.67%, to 26,778.79, the S&P 500 (SPX) gained 25.02 points, or 0.85%, to 2,966.78 and the Nasdaq Composite (IXIC) added 97.02 points, or 1.21%, to 8,103.26.

"Any step towards a trade resolution, and it doesn't have to be a lot of progress - just a step, is viewed very positively by markets," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "And investors at this point are trying to focus on the positive in hopes that there will be some trade resolution down the line."

Chinese blue chips (CSI300) jumped 2.6% to their highest since late April and Germany's export-heavy DAX (GDAXI) gained 1.5% to its highest since August. The Huawei hiatus and M&A activity pushed Europe's tech sector (SX8P) to a one-year peak. (EU)

Fed funds <0#FF:> dropped over five ticks as the market scaled back the probability of a half-point interest rate cut this month to around 15%, from nearer 50% a week ago.

"I think the Fed expectations in the market are very aggressive. Possibly a bit too aggressive," SEB's Peterson said.

In currency markets, safe havens like the yen and Swiss franc gave up some recent gains. The dollar rose 0.4% on the yen to 108.26 and 0.7% on the franc to 0.9830 . [/FRX]

The dollar added 0.4% on a basket of currencies to 96.531 (DXY). The dollar's gains hurt gold, which fell 1.5% to $1,388 per ounce

Oil prices rose as OPEC and its allies looked set to extend supply cuts at least until the end of 2019. Iraq joined top producers Saudi Arabia and Russia in endorsing the policy. [O/R]

© Reuters. FILE PHOTO:  The German share price index DAX graph at the stock exchange in Frankfurt

Brent crude (LCOc1) futures rose $1.55, or 2.4%, to $66.31 a barrel. U.S. crude (CLc1) gained $1.35, or 2.3%, to $59.82.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.