Stocks in Asia poised to trade higher; yuan jumps
Shares in Australia gained in early trade.
Trump said Tuesday that trade talks with China are going well, adding the current March deadline is not a "magical date."
Also on Tuesday, a report said the U.S. is requesting that China keep the yuan stable as part of the trade deal. That sent the offshore Chinese yuan on a path of strong gains.
Stocks in Asia were poised to trade higher on Wednesday, with U.S. major indexes gaining on the back of U.S. President Donald Trump hinting once again that a closely watched trade deadline in March may be pushed back.
The ASX 200 in Australia rose 0.27 percent in early trade as the sectors traded mixed. The materials subindex jumped 1.79 percent as shares of major miners saw strong gains.
Meanwhile, futures pointed to a higher open for the Nikkei 225 in Japan. The Nikkei futures contract in Chicago was at 21,335, as compared to the benchmark index's last close at 21,302.65.
Overnight on Wall Street, the Dow Jones Industrial Average climbed as much as 78.19 points before ending the day up 8.07 points at 25,891.32. The S&P 500gained 0.15 percent to close at 2,779.76 as the materials sector outperformed. The Nasdaq Composite closed 0.2 percent higher at 7,486.77 as Amazon and Netflix both rose more than 1 percent.
Trump said Tuesday that trade talks with China are going well, adding the current March deadline is not a "magical date." Both countries have until then to come up with a deal. Otherwise, additional U.S. tariffs on Chinese products could take effect. Trump indicated last week, however, he would be willing to push back the deadline.
Representatives from the U.S. and China are meeting in Washington this week to resume trade negotiations, with high level discussions set to happen later in the week, the White House said Monday.
Chinese yuan moves
Also on Tuesday, Bloomberg News reported that the U.S. is requesting that China keep the yuan stable as part of the trade deal.
The move would be aimed at mediating any effort by the Chinese to devalue the yuan to counter American tariffs, people familiar with the situation told Bloomberg News. The Trump administration has insisted that moves to devalue the yuan to buoy Chinese exports would be countered with additional or more severe American tariffs, sources told Bloomberg News.
The report sent the offshore Chinese yuan on a path of strong gains. It last traded at 6.7436 against the greenback, after seeing levels above 6.78 yesterday.
"We are not surprised the US government has made such a request. But the request flies in the face of another US demand for a more market‑driven (offshore Chinese yuan)," Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, said in a morning note.
"As we have spelled out frequently, the fundamentals are pushing (the offshore Chinese yuan) weaker, not stronger. China's current account surplus has collapsed to only 0.4% of GDP in 2018 and interest rate spreads have narrowed," Capurso said.
The Australian dollar also saw strong gains, last trading at $0.7165 after bouncing from lows below $0.712 yesterday.
"Unsurprisingly, what is good for (the offshore Chinese yuan) is also good for (the Australian dollar) given the strong trade links between China and Australia," Capurso said.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.529 after seeing highs around 97 yesterday. The Japanese yen traded at 110.58 against the dollar after seeing lows above 110.7 in the previous session.
By: via @AlliesFin Serve T.ME/ALLiESFiN
