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Asia divides up, fatigue curbs dollars

SYDNEY (Reuters) – Asian stocks crashed cautiously higher on Monday with conflicting signals about the chance of armed violence in…

SYDNEY (Reuters) – Asian stocks crashed cautiously higher on Monday with conflicting signals about the chance of armed violence in the trade and trade issue in China and the United States, while the Federal Reserve’s newly discovered global economy underestimated the dollar.

A man passes an electronic trading card outside a broker in Tokyo, Japan, November 1

3, 2018. REUTERS / Toru Hanai

MSCI’s broadest Asia Pacific Asia Index outside Japan climbed 0.1 percent and Chinese blue chip 0 , 5 percent.

Japan’s Nikkei got 0.4 percent, but the E-Mini futures for the S & P 500 fell 0.3 percent.

Wall Street was stalled on Friday after US President Donald Trump said he should not introduce more tariffs on Chinese goods after Beijing sent a list of measures it was willing to take to resolve trade tensions.

The comment gave rise to speculation about a deal when Trump meets Chinese president Xi Jinping on the side of a G20 summit in Argentina later this month.

Sino-U.S tensions were, however, clearly demonstrated at an APEC meeting in Papua New Guinea this weekend, where leaders failed to agree on a communique for the first time ever.

US. Vice President Mike Pence said in a blunt speech that there would be no end to US customs duties of $ 250 billion Chinese goods until China changed its way.

“Trump’s comments are seen as offering a glimpse of hope that further tariff measures could be maintained,” said NAB’s head of FX strategy, Ray Attrill.

“The exchange of barbs between Pence and China’s President Xi Jinping in PNG this weekend continues to suggest that this is unlikely.”

SENSING A FED SHIFT

Also, uncertainty was the prospect of US interest rates.

Federal Reserve policymakers are still increasing signal hikes ahead but were also more concerned about a potential global slowdown, leading markets to suspect that the tightening cycle may not have much longer to run.

“Fed officials have a lighter time showing a somewhat less Hawaiian slope by noting the emerging global slowdown,” said Deutsche Bank’s macro strategy Alan Ruskin.

“There are surveys of expectations of price increases that move over” neutral “,” as the Fed has nominated between 2.5 and 3 percent. “This shift in tons is subtle but fits the more bullish market at the end of the time and starts to have a significant impact on the dollar.”

It will focus attention on New York’s appearance. Fed President John Williams later on Monday to see if he echo the same theme.

Investors have already extended the odds of further increases, with a December move now priced at 73 percent, down from over 90 percent. Futures entail an interest rate of 2.74 percent by the end of next year, compared with 2.93 percent early in the month. <0#FF:>

The return on US 10-year paper has duly decreased to 3.06 percent, from a recent peak of 3.25 percent.

The dollar followed to reach 96,441 against a basket of currencies, down from a peak of 97,693. The euro was $ 1,1414, while the dollar stood at 112.66 yen.

Sterling was vulnerable to $ 1,2833 after political concern over Brexit caused steep losses last week.

British Prime Minister Theresa May said on Sunday that she was in danger of delaying Brexit, as she faced the possibility of a leadership challenge from her own party.

With both pro-EU and pro-Brexit legislators dissatisfied with the draft agreement, it is not clear that she will be able to win Parliament’s support, which gives rise to the risk that Britain will leave the EU without an agreement.

PHOTO PHOTO: An American five-dollar note is shown in this illustration on June 1, 2017. REUTERS / Thomas White / Illustration / File Photo

In the commodity markets, gold found support from the dollar’s collapse and held $ 1,1221.92 .

Oil prices hit their sixth straight week with losses last week, but have found some support from expectations. The organization for the petroleum exporting countries would reduce production.

Brent crude oil was up 72 cents at $ 67.48 per barrel, while US crude gained 76 cents to $ 57.22.

Editing Shri Navaratnam

Our Standards: Thomson Reuters Trust Principles.

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