Asian Stocks Eye Muted Open on Trade Wait-and-See: Markets Wrap

(Bloomberg) -- Asian stocks were poised for a relatively muted start to trading Thursday as investors await developments from high-level trade talks between the U.S. and China and data on the Chinese economy. U.S. equities earlier nudged higher and Treasuries fell, while the dollar rose.

Futures pointed to a flat open for share indexes in Tokyo, while contracts in Hong Kong and Australia dipped. Mainland Chinese equities will be closely watched after the Shanghai Composite Index extended its rally from January lows to 10 percent. The S&P 500 Index came off its highs Wednesday after Senator Marco Rubio announced a bill to tax buybacks on equal footing with dividends. The dollar gained and Treasuries edged lower as data showed U.S. inflation remained contained.

President Donald Trump has said he’s open to extending a March 1 deadline to raise tariffs on Chinese products if the two sides are near an agreement, helping to buoy investor appetite for stocks this week. He told reporters in the Oval Office on Wednesday that talks to resolve the U.S. trade war with China are making good progress. U.S. inflation numbers bolstered the Federal Reserve’s decision to be patient on raising interest rates and with many major central banks talking cautiously about global growth, investor attention is firmly focused on the outlook for global trade.

Elsewhere, oil continued its rebound from a two-week low, after Saudi Arabia pledged to deepen output cuts, and held most of those gains even after U.S. crude stockpiles came in larger than anticipated. Energy shares led gains on the S&P 500.

Here are some key events coming up:

• Steven Mnuchin and Robert Lighthizer are in Beijing for high-level talks, and will meet China President Xi Jinping on Friday, the South China Morning Post reported.
• China’s exports probably fell again in January from a year earlier, but at a slower pace than in December.

These are the main moves in markets:

Stocks

• Futures on Japan’s Nikkei 225 were flat.
• Hang Seng Index futures fell 0.2 percent.
• Futures on Australia’s S&P/ASX 200 Index slipped 0.2 percent.
• The S&P 500 Index rose 0.3 percent.

Currencies

• The yen fell 0.5 percent to 111.02 per dollar.
• The offshore yuan slipped 0.1 percent to 6.7828 per dollar.
• The Bloomberg Dollar Spot Index rose 0.4 percent.
• The euro decreased 0.5 percent to $1.1266.
• The British pound fell 0.3 percent to $1.2848.

Bonds

• The yield on 10-year Treasuries rose two basis points to 2.71 percent.

Commodities

• The Bloomberg Commodity Index gained 0.1 percent.
• West Texas Intermediate crude climbed 1.8 percent to $54.03 a barrel.
• Gold fell 0.4 percent to $1,305.95 an ounce.

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