Asian markets rose to near two- month highs today, the highest since the trade-tensions began to show, after a perceived thaw in US-China trade tensions. President Donald Trump pledged to help get ZTE Corp “back into business fast”, as it was hurt by a US ban.
The North Korea angle also signals the need for the US and China to bury the hatchet at the earliest possible, as a settlement with North Korea will not be effective, unless the US has China by its side. The United States has said it will lift sanctions on Pyongyang if North Korea agrees to completely dismantle its nuclear weapons program.
The Japanese market recovered after a weak start and is modestly higher, following mixed cues from Wall Street. A stronger Yen continues to eat into exporters’ revenues, pulling down their shares.
The Australian market is also modestly higher, with mining and oil stocks leading from the front.
Brakes were applied to the US dollar’s rally, as US yields were sinking, with investors lowering their expectations about rapid rate hikes this year. The Bank of England and Royal Bank of New Zealand, have both reiterated over the last week that the official cash rate will remain at the lows as is for some time.
In other news, the United States threatened on Sunday to impose sanctions on European companies that do business with Iran, as the remaining participants in the Iran nuclear accord stiffened their resolve to keep that agreement operational.
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