Rate this post
August 27, 2018 @ 12:19 +03:00
Asian shares rose on Monday, taking heart from comments by the Federal Reserve chairman that drove Wall Street to record highs on Friday, and as a tweak to the way China’s central bank manages its currency boosted the yuan and stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 1.1 percent, while Japan’s Nikkei stock index .N225 closed 0.9 percent higher. European share markets were set to follow Asia higher, with European spreadbetters expecting Germany’s DAX .GDAXI to gain 45 points to 12,439 and France’s CAC 40 .FCHI expected to open 22 points higher at 5,454.
Adding to the positive mood, U.S. and Mexican trade negotiators appeared close to reaching a common position on the North American Free Trade Agreement (NAFTA), with Mexican Economy Minister Ildefonso Guajardo saying on Sunday that talks have “continued to make progress”.
A prospective trade deal with Mexico “takes a little bit of global trade war risk off the table,” said Robert Carnell, chief economist and head of research, Asia-Pacific at ING. “Every time there’s a move toward fewer tariffs from the U.S. instead of more, then that should take a little pressure off the U.S. dollar,” he said. In China, shares rose to their highest levels in two weeks. The Shanghai Composite index .SSEC added 1.7 percent and the blue-chip CSI300 index .CSI300 surged 2.2 percent, after the People’s Bank of China late on Friday revived a “counter-cyclical factor” used to set the midpoint of the daily trading band of the yuan, in a bid to support it.
The yuan hit a two-and-a-half-week high against the U.S. dollar in early trade on Monday as the PBOC set the day’s midpoint CNY=PBOC at a stronger-than-expected level. On Friday, the S&P500 index .SPX and Nasdaq Composite .IXIC hit record highs, following comments from the chairman of the U.S. Federal Reserve, Jerome Powell, who said a gradual approach to raising rates was best to protect the U.S. economy and job growth.