REFILE-GLOBAL MARKETS-Asia shares inch up, cautious on Sino-U.S. trade talks

  • Reuters
  • Stock Market News
REFILE-GLOBAL MARKETS-Asia shares inch up, cautious on Sino-U.S. trade talks
Credit: © Reuters.

(Corrects wording on tariffs in the fifth paragraph)

* Eyes on Sino-U.S. trade talks touted for this week

* Nikkei flat, KOSPI leads Asia shares higher

* Dollar off highs, focus on China yuan and Turkish lira

By Wayne Cole

SYDNEY, Aug 20 (Reuters) - Asian share markets crept cautiously higher on Monday as investors awaited developments on proposed Sino-U.S. trade talks, while keeping a wary eye on the Chinese yuan and Turkish lira for any new signs of strain.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.3 percent in early trade, with South Korea .KS11 leading the way with a rise of 0.6 percent.

Japan's Nikkei .N225 wavered either side of flat, much as did the yen on the dollar. EMini futures for the S&P 500 ESc1 edged up 0.08 percent.

Investors had been encouraged by news China and the United States will hold lower-level trade talks this month, offering hope that they might resolve an escalating tariff war.

Reports suggested the talks in Washington would take place on Aug. 21 and 22, just before U.S. tariffs on $16 billion of Chinese goods take effect. reported rumours the talks could set the stage for a summit between U.S. President Donald Trump and Chinese President Xi Jinping in November.

The U.S. Trade Representative's office said on Friday it doubled the length of tariff hearings on the next $200 billion worth of Chinese goods to six days from the previously planned three due to overwhelming demand from companies to testify.

The hearings will be held Aug. 20-24 and on Aug. 27.

Helping the general mood was a steadying in the Turkish lira, which was holding at 5.9800 per dollar TRYTOM=D3 early on Monday.

Qatar and Turkey's central banks have signed a currency swap to provide liquidity and support for financial stability, Qatar's central bank said on Sunday. toward Turkey has stabilised, but medium-term vulnerabilities remain substantial and markets continue to penalise currencies with weak fundamentals," cautioned Barclays (LON: BARC ) economist Michael Gapen.

"But we see contagion risk from Turkey as a relatively low-risk outcome. History indicates emerging market volatility is unlikely to knock the U.S. economy, or the Fed, off course."

DOLLAR OFF PEAKS

Minutes of the Federal Reserve's August policy meeting are due on Wednesday and should show policy makers upbeat on the economy and committed to further gradual rate hikes.

Federal Reserve Chair Jerome Powell and other central bankers meet at Jackson Hole from Friday to discuss the root causes of stubbornly low inflation, slow wage growth and tepid productivity gains. prospect of yet higher U.S. rates had been underpinning the dollar, though the currency took a knock on Friday as risk appetite improved just a little.

The dollar index .DXY was steady at 96.129 on Monday, having fallen almost 0.6 percent at the end of last week.

The euro held at $1.1435 EUR= after bouncing from a 13-month trough at $1.1297 last week, while the dollar was idling at 110.47 yen JPY= and just above recent lows at 110.11/31.

In commodity markets, gold was flat at $1,184.19 an ounce XAU= having suffered its largest weekly loss since May 2017. It hit a 19-month low at $1,159.96 last week.

The upward trend in the U.S. dollar has also pressured oil, with U.S. crude down for a seventh consecutive week and global benchmark Brent off for a third week. O/R

Early Monday, Brent was 12 cents lower at $71.71 a barrel LCc1 , while U.S. crude eased 13 cents to $65.78 CLc1 .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ MSCI and Nikkei chart

http://reut.rs/2sSBRiD

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes)

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