Asia stocks to gain, yuan climbs on trade optimism

A pedestrian is reflected in an electronic stock board outside a securities firm in Kobe. (Bloomberg pic)

Stocks in Asia looked set to build on recent gains and US equity futures advanced amid positive signals emanating from trade negotiations.

The yuan and the Australian dollar advanced.

President Donald Trump said he will delay the March 1 deadline for higher US tariffs on US$200 billion of Chinese goods.

An advance that took Asian shares to the highest level since October was poised to build with small gains indicated for Monday.

The yuan edged higher amid reports there has yet to be an agreement on the critical issue of how to enforce a proposed currency pact that would ensure Beijing doesn’t depreciate the currency.

An official delay from the US may give fresh impetus to extend a global rally in equities that’s being tested amid an uncertain future on global trade and forecasts for weakening economic growth that’s threatening to unravel the surge in risk assets since Christmas.

Bond investors, who indicate more caution as the 10-year Treasury yield remains at 2.65 percent, will be looking to this week’s Humphrey-Hawkins hearing from Federal Reserve Chairman Jerome Powell to get the latest read on policy.

“As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for US & China!” Trump said in a tweet.

Trade discussions had been ongoing over the weekend after Treasury Secretary Steven Mnuchin said the two sides agreed on a yuan currency provision, though four people familiar with the matter said no deal had been reached.

Elsewhere, oil held around US$57 a barrel.

Crude may rally further as Opec cuts and sanctions on Iran and Venezuela create a shortage of heavy crude, Vitol Chief Executive Officer Russell Hardy said.

The pound edged higher as UK Prime Minister Theresa May launched a last-ditch bid to stop Parliament from taking Brexit policy out of her hands by promising a binding vote on her divorce deal by March 12.