Asian Stocks Gain As Investors Look to Trump/Xi Summit
- Asian stocks managed gains despite a degree of geopolitical uncertainty
- President Trump meets President Xi on Thursday, and North Korea fired another missile
- The US Dollar crept lower, losing early gains
Asian stocks largely gained Wednesday although their session was overshadowed by concerns about what will transpire when US President Donald Trump meets his Chinese opposite number Xi Jinping in Florida on Thursday. No one yet knows what if anything their meeting will mean for the global trade on which so many regional economies depend.
North Korea reportedly fired yet another missile into the sea in Japan’s general direction, which may also have blunted risk appetite a little. South Korea's Kospi certainly lagged regional peers.
Investors were also looking ahead to the release of minutes from the US Federal Reserve’s last monetary policy conclave,- on March 15- at which interest rates were raised. They’ll see daylight at 1800 GMT.
The Nikkei 225 ended up 0.3%. Japan’s service sector expanded in March, according to its Purchasing Managers Index which put in a slightly better performance than the manufacturing portion of the economy. Australia’s ASX gained by a similar amount thanks to a fightback by raw material and energy names. Mainland Chinese stocks had the best time of it though, with construction shares gaining strongly after Beijing’s weekend announcement of a vast new economic zone.
The US Dollar made some modest early gains against the Japanese Yen and other Asian units, but drifted lower through the day. The Dollar Index which tracks it against a trade-weighted bunch of six currencies was a little lower. A fall in US Treasury yields as risk appetite wanes before the two Presidential heavyweights meet has weighed on the greenback a little.
Crude oil prices rose to one-month highs, reportedly on hopes for some gradual tightening in a now long-oversupplied market. Both the US benchmark and international Brent rose just over 20 cents. Meanwhile gold prices held firm at around $1,255/ounce.
The rest of the global day has a US focus, but two UK PMIs are due, the March service-sector reading and the composite. The latter also includes manufacturing and construction. Similar data from the US Institute for Supply Management will be released, as will crude oil inventory data and of course those Fed minutes.
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--- Written by David Cottle, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.