Asian stocks rise on Fed restraint, US-China trade hopes

Roman Schwartz
January 14, 2019

"We're negotiating and having tremendous success with China", Trump told reporters as he left the White House on a trip to the USA border with Mexico on the 20th day of a partial shutdown of the USA government. The Shanghai Composite index was up 0.6 percent at 2,550.35.

"If you want to gauge how investors are viewing the trade talks, just watch tech, and semiconductors in particular", said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.

It ended nine successive days of an increase in oil price that had come about on hopes of an end to the U.S. trade war with China, but it still ended the week higher. Hong Kong's Hang Seng rose 0.4 percent to 26,633.47.

Stocks have rallied this week, helped by promises of patience from the Federal Reserve, the European Central Bank mulling more cheap money, and progress in trade talks between Washington and Beijing.

At the start of trading on Wednesday, crude oil prices were up around 1 percent through OPEC curbing oil production and with the ongoing trade talks between the US and China generating investor optimism. They said that the central bank will be especially cautious about pushing ahead with interest-rate increases after raising them four times a year ago.

Offsetting the adverse political impact, oil rigs in the United States declined by four, the second weekly fall, as caution grew among oil producers in their drilling plans for 2019, according to USA energy services firm Baker Hughes on Friday.

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US-CHINA TALKS: Talks between American and Chinese negotiators may have ended without significant breakthroughs, but traders are choosing to focus on the positives. In December, U.S. President Donald Trump and Chinese leader Xi Jinping agreed to a 90-day tariffs cease-fire, for negotiators to soothe tensions that have unsettled trade. "The return of risk appetite, in turn, has pressured the U.S dollar lower", DBS Group Research strategists Philip Wee and Eugene Leow said in a commentary.

ENERGY: Oil prices settled after hitting their highest levels in nearly a month. Producer prices inched up 0.9 percent from a year ago, far from November's 2.7 percent rise. That helped Boeing climb 2.6 percent to $352.61 and General Electric jumped 5.2 percent to $8.94 while Deere rose 3.1 percent to $159.12. It added another 23 cents to $52.59 per barrel on Thursday.

MSCI's all-country index .MIWD00000PUS climbed 1.03 percent for a fourth day of gains. International Brent crude futures LCOc1 were up $2.71, or 4.62 percent, at $61.43 per barrel.

In currency markets, the dollar rose against the euro, boosted by technical factors after the euro hit key resistance levels.

Fears that Nigeria's 2019 budget may suffer huge revenue short fall may be abetted as the prices of crude oil in the global market rebounded on Wednesday, selling at the $60 per barrel benchmark set for the budget by the Federal Government.

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