Stocks Jump With Yuan on Trade Truce; Oil Surges: Markets Wrap




Stocks Jump With Yuan on Trade Truce; Oil Surges: Markets Wrap
Stocks Jump With Yuan on Trade Truce; Oil Surges: Markets Wrap  

(Bloomberg) -- Stocks in Asia climbed along with U.S. equity futures and the yuan after the American and Chinese presidents reached a truce in the trade war and agreed to resume talks. Treasuries, gold and the yen all declined.

Futures on the S&P 500 climbed as much as 1.1% before the strength of the risk-on trade eased as Monday trading continued. Japanese shares also jumped, though South Korea's benchmark saw limited gains. China's offshore yuan advanced and FTSE China A50 futures surged more than 2%. The deal between Presidents Xi Jinping and Donald Trump validated investor hopes after mixed signals heading into Saturday's meeting. Oil rose as Russia struck a deal with Saudi Arabia to extend the OPEC+ agreement at current production levels for the rest of this year and potentially into early 2020.

Though there's a lack of detail over the next steps for U.S.-China talks, many were surprised by Trump's decision to allow Huawei Technologies Co. to buy some products from U.S. suppliers -- a move that may become clearer when the Commerce Department meets this week. Existing tariffs will be maintained, and Trump said after the G-20 meeting that the course of the trade negotiations will determine if more or less duties are needed.

Fresh optimism on the trade front may help cushion disappointing economic data. China's purchasing manager index showed manufacturing continued to deteriorate in June. Monday brings the U.S. version of that gauge.

"After the markets were stuck in trade war limbo for the better part of two months, investors will breathe a massive, but exhausted, sigh of relief that both the U.S. and China opted to push the reset button and restart trade negotiations," said Stephen Innes, managing partner at Vanguard Markets Ltd.

Tech shares are in focus. Samsung Electronics Co. -- the world's biggest chipmaker -- opened flat, though SK Hynix Inc., another supplier to both Huawei and U.S. companies, rose more than 1%. Hong Kong markets are closed Monday for a holiday.

"While most expected that both sides will calm down to agree to further discussion," lifting the ban on Huawei was a surprise, said Hao Hong, a strategist at Bocom International in Hong Kong. "Lifting the ban for now shows progress in the negotiation and a sincerity to discuss further."

Read more on the developments over the weekend and the impact on markets:

Trump Says U.S. 'Winning' Trade War After Reviving China TalksChina Traders Gear Up for Relief Rally, Though Caution PrevailsFed Cut Bets Won't Vanish Just Because Trump and Xi Played Nice

Here are some key events coming up:

Boris Johnson and Jeremy Hunt campaign through the week as grassroots Conservative Party members decide who'll be Britain's next prime minister.OPEC+, a wider coalition that includes Russia, meets in Vienna Tuesday. Energy ministers from Saudi Arabia and Russia are likely to speak at the press conference following the meeting.U.S. celebrates the Independence Day holiday on Thursday.The U.S. jobs report is due Friday and is projected to show nonfarm payrolls rose by 160,000 in June, rebounding from a reading of 75,000 the month prior. The June employment situation report is also projected to show the unemployment rate held at 3.6%.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index climbed 0.7% as of 10:02 a.m. in Tokyo. The underlying gauge advanced 0.6% on Friday.Japan's Topix index rose 1.3%.Australia's S&P/ASX 200 Index gained 0.5%.South Korea's Kospi index added 0.2%.Futures on the FTSE China A50 Index rose 2.1%.

Currencies

The yen fell 0.4% to 108.31 per dollar.The offshore yuan added 0.5% to 6.8330 per dollar.The euro was little changed at $1.1361.

Bonds

The yield on 10-year Treasuries rose three basis points to 2.04%.Australia's 10-year yield added about four basis points to 1.36%.

Commodities

Gold fell 1.1% to $1,394.73 an ounce.West Texas Intermediate crude rose 1.9% to $59.60 a barrel.

--With assistance from Lilian Karunungan, Abhishek Vishnoi and Cormac Mullen.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.net

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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