In Asian Equity Markets indices were mostly higher Thursday morning as investors digest recent developments on U.S.-China trade. In Japan, the Nikkei 225 gained 0.64% in morning trade as shares of index heavyweight and robot maker Fanuc jumped more than 2%. Mainland Chinese stocks edged higher in early trade, with the Shanghai composite and the Shenzhen component both up at least 0.4% each. Hong Kong’s Hang Seng index gained 0.63%. Meanwhile, shares in Australia also advanced after leading losses among regional markets on Wednesday, with the S&P/ASX 200 gaining 0.89%.
In Currency Markets the dollar and export-oriented currencies found support on Thursday as upbeat trade comments from U.S. President Donald Trump cheered the market, while New Zealand’s softer-than-expected banking reforms pushed the kiwi to a four-month high. The flight to safety seen on Wednesday reversed after Trump said trade talks with China were going “very well,” a day after floating the idea that a deal might have to wait until after the 2020 presidential election. The British pound crossed the $1.31 mark for the first time since May overnight as expectations that Prime Minister Boris Johnson would win a majority at next week’s election firmed.
In Commodities Markets oil prices edged lower in muted trading on Thursday ahead of the start of OPEC meetings later in the day, steadying after the previous session’s steep gains on a sharp drop in U.S. crude inventories and expectations of more output cuts. Brent crude futures fell 10 cents, or 0.2%, to $62.90 a barrel. Brent jumped 3.6% on Wednesday. West Texas Intermediate (WTI) crude futures fell 22 cents, or 0.4%, to $58.21 a barrel. They settled up 4.2% on Wednesday. Oil prices jumped on Wednesday after U.S. crude inventories fell by much more than expected, according to official figures.
In US Equity Markets indices broke a three-day losing streak on Wednesday, following a report that the United States and China were moving closer to signing a “phase one” trade deal. The S&P 500 was up 0.63%, at 3,112.65 and the Nasdaq Composite rose 0.53%, at 8,565.86. All the 11 major S&P 500 sectors were trading higher, with energy stocks gaining the most as oil prices surged 4%. Expedia Group Inc jumped 6.2%, the most on the S&P 500, after its chief executive officer and finance head resigned. Johnson & Johnson gained 1.6% after it said recent tests showed Johnson’s Baby Powder was free of asbestos.
In Bond Markets U.S. Treasury yields rose on Wednesday on an improved outlook for a U.S.-China trade deal, and as investors brushed off mixed U.S. economic data. The benchmark 10-year yield was up 7.4 basis points at 1.7827% in afternoon trading as the global appetite for risk increased. The two-year yield, typically seen as indicator of interest rate expectations, rose 5.2 basis points to 1.5842% in afternoon trading. The spread between the two- and 10-year yields widened 2.05 basis points.