Asia Stocks Push Higher; Dollar Holds Gains

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(Feb 12): Asian stocks traded higher Tuesday with the biggest advance seen in Japan after the yen weakened. The dollar held gains and 10-year Treasuries were steady.

Despite a rise in Tokyo as traders returned from a holiday, markets remained hostage to the next crucial round of trade talks. Equities ticked higher in Sydney and Seoul, while futures pointed to a weaker start in China and Hong Kong. Earlier, the S&P 500 Index finished little changed after drifting most of the session. The dollar entered its longest rally since January 2016, recouping its year-to-date losses, as central banks around the world tilt more to the dovish side, boosting the relative appeal of the greenback.

Investors are weighing the prospects for success of this week’s high-level U.S.-China trade talks ahead of a March 1 deadline for higher tariffs, while mulling the likelihood of a U.S. recession and its impact on earnings as reporting season rolls on. The threat of a shutdown in Washington also looms, with political tensions flaring again between Congress and the president.

Elsewhere, West Texas Intermediate crude was little changed following its lowest close in two weeks. The pound stayed lower after the U.K. economy unexpectedly shrank in December.

Here are some key events coming up:

Chinese Vice Premier Liu He expected to join U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in high-level trade talks Thursday and Friday Earnings season continues with reports from companies including Michelin, Nissan, Cisco, Vivendi, Nvidia, Nestle, Coca-Cola and Credit Suisse. Sweden’s Riksbank is expected to keep interest rates at minus 0.25 percent on Wednesday after the first increase in more than seven years in December. Data Wednesday is expected to show U.S. consumer prices rose 0.1 percent in January, after falling 0.1 percent in December. If no deal is reached on the U.S-Mexico border wall, parts of the federal U.S. government may shut down again later this week when stopgap government funding expires.

These are the main moves in markets:

Stocks

Japan’s Topix index jumped 1 percent as of 9:14 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.3 percent. Hong Kong’s Hang Seng Index futures fell 0.1 percent. S&P 500 futures ticked higher. The underlying gauge fell less than 0.1 percent. The MSCI Asia Pacific Index rose 0.3 percent.

Currencies

The Japanese yen was steady at 110.45 per dollar. It fell 0.6 percent in the previous session to the weakest in more than six weeks. The offshore yuan held at 6.8024 per dollar. The Bloomberg Dollar Spot Index edged higher, adding to a 0.5 percent gain. The euro traded at $1.1277. The British pound was at $1.2861.

Bonds

The yield on 10-year Treasuries was steady at 2.65 percent. Australia’s 10-year bond yield rose two basis points to 2.06 percent.

Commodities

West Texas Intermediate crude rose 0.2 percent to $52.50 a barrel. Gold was stable at $1,307.25 an ounce. - Bloomberg