Stocks in Australia declined on Monday morning as investors await the signing of a phase-one trade deal between the U.S. and China.
The S&P/ASX 200 was down 0.61% in early trade.
Japan’s markets are closed for a holiday on Monday.
This week Wednesday, U.S. President Donald Trump and Chinese officials are due to sign the long-awaited phase one trade deal between both countries, which have been embroiled in a long-running trade dispute. China’s Vice Premier Liu He, who leads the Chinese negotiation team in the trade talks, is set to visit Washington from today, the country’s commerce ministry said.
The deal will involve some tariff relief, increased Chinese purchases of U.S. agricultural goods and changes to intellectual property and technology rules. Meanwhile, Washington and Beijing have agreed to hold semiannual talks in targeting to resolve disputes and push for reforms, according to a report by the Wall Street Journal, citing sources.
“The key detail would be the timing of the expected rollback in tariffs,” said Han Tan, market analyst at FXTM. “The lowering of these barriers to trade, sooner rather than later, should give the global economy more time to recover and provide cause for investors to add exposure to riskier assets, including those in emerging markets.”
The Chinese yuan jumped to a five-month high last week in anticipation of the signing.
Elsewhere, Taiwan President Tsai Ing-wen was reelected in a landslide victory over the weekend elections. She beat her main opponent Han Kuo-yu of the Kuomintang party — which favors close ties with China — by more than 2.6 million votes. That could fuel further tension with China, which has tried to get the island to accept its rule by way of threats and economic inducements.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was little changed on Monday, as it continued to hover above the 97 level. It was last at 97.420.
During Monday morning’s trading hours in Asia, oil prices continued to fall after last week’s declines. U.S. crude futures dropped 0.44% to $58.77 per barrel, and Brent crude was down 0.37% to $64.74 per barrel.