Asian Stocks Gain; Dollar Rises With U.S. Yields: Markets Wrap

Bloomberg.com — Most Asian stocks gained Monday as U.S. equity futures jumped in the wake of news that the Sino-American trade war is on hold for now. Treasury yields nudged higher, taking the dollar with them.

Equity benchmarks rose in Hong Kong, China and Korea, while they fluctuated in Japan and Australia. The S&P 500 Index contracts gained 0.6 percent. Oil futures climbed. U.S. Treasury Secretary Steven Mnuchin said the U.S. was “putting the trade war on hold,” amid progress in talks with China. Stocks had closed lower Friday and Treasury yields dropped under 3.1 percent amid mixed signals on trade. Safe-haven assets like the yen and gold declined.

“The trade talks over the weekend suggest that real trade-war outcomes are very unlikely,” Robert Mead, co-head of Asia-Pacific at Pacific Investment Management Co., said in a Bloomberg Television interview. “This seems to suggest that global trade stays healthy — we don’t have to worry too much about that.” Mead said the dollar rally “probably has a bit further to go.”

Investors this week will be keeping a close eye on the minutes of May’s Federal Reserve meeting, to be released Wednesday, along with preliminary purchasing manager indexes in the euro zone. Geopolitics remains in focus as South Korea’s president visits Washington to discuss North Korea and Brexit negotiations resume in Brussels.

Elsewhere, emerging-market currencies continued to come under pressure. The Indonesian rupiah weakened as an interest-rate hike last week failed to stem a sell-off, and the central bank vowed to continue to intervene in the forex and bond markets. The Malaysian ringgit dropped for a ninth day to be on course for the longest stretch of losses since November 2016. The euro steadied near a five-month low as Italy’s two populist leaders agreed on a prime minister and are set to propose a cabinet as early as Monday.