(Bloomberg) — Asian stocks opened higher on Monday following two consecutive weeks of declines as easing trade tensions between the world’s largest economies bolstered sentiment.
Shares in Japan and South Korea rose, while Australia dipped, after the region’s equities fell on Friday amid concerns on US regional banks. A gauge of the dollar edged up, while oil steadied after dropping for three weeks. US equity futures traded flat after paring most of their earlier gains. Gold slid 0.5%.
President Donald Trump sought to ease trade tensions, saying the much higher tariffs he had threatened to impose on Chinese imports wouldn’t be sustainable. A new round of US-China trade talks are also set for this week with Treasury Secretary Scott Bessent and Vice Premier He Lifeng facing the task of negotiating down new escalatory measures between the two nations.
“The markets are pricing in that things will de-escalate,” wrote Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “However, the markets are likely to remain jittery until such backdowns are explicitly announced.”
Bessent said he spoke virtually with He on Friday evening. The Treasury chief earlier described the discussions with He as “frank and detailed” and reaffirmed plans to meet in-person next week. US Trade Representative Jamieson Greer also took part in the online talks.
Bessent’s comments came after Trump expressed optimism that talks with Chinese officials may yield an agreement to defuse the crisis that saw the US leader threaten to drastically hike tariffs. Taken together, the remarks signaled an effort by Washington to calm fears of a full-blown trade war with Beijing that could have a seismic effect on the global economy.
“There’s a prevailing belief that US–China trade headlines will remain skewed toward a positive outcome,” Chris Weston, head of research at Pepperstone Group, wrote in a note to clients.
Traders will first need to navigate China’s monthly data dump on Monday that may show growth slowed in the third quarter despite a boom in exports, according to a Bloomberg survey.
Chinese political leaders will also begin gathering in Beijing for a four-day meeting, known as its Fourth Plenum, with traders watching for fresh measures to extend China’s strongest equity rally in eight years and shore up the yuan. While a detailed plan will only be released in March next year, investors will scrutinize the post-meeting readout for any policy signals ahead of the possible meeting between Xi and Trump.
Attention in Asia is also on Japan ahead of a vote on Tuesday that will determine the country’s next prime minister and provide clarity for investors
In geopolitical news, Israel launched strikes against Hamas in Gaza and reportedly suspended all aid shipments on Sunday after blaming Hamas for a lethal Palestinian ambush that left two soldiers dead.
French bond futures opened lower after S&P Global Ratings downgraded France to A+ from AA-, saying the country’s budget uncertainty was “elevated.” France has now lost its double-A rating at two of the three major credit assessors in little more than a month, potentially forcing some funds with ultra-strict investment criteria to sell the country’s bonds.
Corporate News:
Kering SA agreed to sell its beauty division to L’Oreal SA as part of a long-term strategic alliance, with Chief Executive Luca de Meo seeking to turn around the French luxury giant’s fortunes. Sany Heavy Industry Co. started taking investor orders to raise as much as HK$12.4 billion ($1.6 billion) in a Hong Kong listing, joining a flood of Chinese companies seeking to capitalize on the Asian financial hub’s hot market. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:18 a.m. Tokyo time Hang Seng futures rose 2.5% Japan’s Topix rose 1.5% Australia’s S&P/ASX 200 fell 0.3% Euro Stoxx 50 futures rose 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1659 The Japanese yen fell 0.2% to 150.87 per dollar The offshore yuan was little changed at 7.1264 per dollar The Australian dollar was unchanged at $0.6499 Cryptocurrencies
Bitcoin fell 0.7% to $108,104.29 Ether fell 1.2% to $3,956.86 Bonds
The yield on 10-year Treasuries was little changed at 4.01% Japan’s 10-year yield declined 3.5 basis points to 1.620% Australia’s 10-year yield advanced six basis points to 4.16% Commodities
West Texas Intermediate crude fell 0.4% to $57.31 a barrel Spot gold fell 0.7% to $4,223.68 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess.
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