Asian shares jump after Trump and Xi’s phone call

Global investors lapped up news that the leaders of the world’s two largest economies may be ready to take concrete steps to resolve their bitter trade dispute — one of the major factors behind the recent equity market rout.

US President Donald Trump said trade discussions with China were “moving along nicely” and his Chinese counterpart Xi Jinping expressed the hope of expanding trade co-operation.

Trump said he planned to meet with Xi at an upcoming Group of 20 (G20) summit

Earlier this week, Trump had been quoted as saying China was not ready to make a deal yet and he would impose more tariffs on Chinese goods unless he and Xi had productive talks.

“While we are still cautious over a full resolution of recent tensions in the medium term, resumption of dialogue between Washington and Beijing would be good enough to investors for now. Hence the next four weeks between the US midterm elections and the G20 meeting in Argentina on November 30 will be important to see how things progress,” said Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management.

“Combined with the prospects of more economic stimulus from China and reasonable valuations in Asian equities, investors could use this opportunity to reload on emerging market and Asia assets,” he said.

All the same, a US justice department indictment said companies based in mainland China and Taiwan had conspired to steal trade secrets for a US semiconductor firm, underscoring China-US trade tensions.

In the (data) dumps

Investors will be looking ahead to a US jobs report, due at 12.30pm GMT, for more indications on the health of the US economy and the clues on the pace of further interest rate rises.

US nonfarm payroll figures are expected to rise 190,000 in October from 134,000 a month earlier, with average hourly earnings seen increasing 0.2% in October after a 0.3% gain the previous month.

Those numbers follow data this week revealing slower factory growth around the world, adding to worries about the outlook for corporate earnings, business investment and trade.

Data from the US showed cooling manufacturing activity in October as a measure of new orders hit a one-and-a-half-year low. That came after manufacturing surveys showed factory activity and export orders weakening across Asia as the impact of the trade war deepened.

Source: businesslive.co.za