Asian Shares Rise Even as Trade Dispute Continues

Asian shares inched higher on Monday, bolstered by a bounce in the US stock futures that quenched sentiment. On the flip side, US President Donald Trump pushed on with his Twitter tirade against China ahead of Chinese President Xi Jinping’s keynote speech.

Donald Trump continues Twitter war with China amid trade war fears.

Meanwhile, confusion loom large after reports said that US forces struck Syrian sites. This was denied by the Pentagon right off the bat. On Sunday, Trump claimed that there would be a “big price to pay” after medical aid groups reported a huge number of people killed by poison gas in a town held by rebels.

On the other hand, investors in Asia felt a little encouraged by the 0.7 percent rise on the S&P 500 e-mini futures. Japan’s Nikkei gained 0.6 percent. Chinese blue chips increased 0.3 percent, while Hong Kong rose 2 percent.

Trump also claimed that China would have to take down the trade barriers because it was “the right thing to do.”

Last week, Trump threatened to impose $100 billion more in tariffs on Chinese imports. Beijing replied that it was fully prepared to respond with a “fierce counter strike.”

According to analysts, the drama would last for some time due to the fact that the lengthy public discussion period on US tariff proposals would take a similarly long time. A decision would probably come around the latter part of July or early August.

“This is not going to happen tomorrow, and given the mercurial nature of the US administration, the whole issue could well disappear before anything really happens,” said ACLS Global chief strategist Marshall Gittler.

“Many market participants may be starting to think that this is just a lot of sound and fury, signifying nothing in the end. But…you never know, US trade policy is in the hands of someone totally unpredictable,” he added.

Related: US Revises Trade Deal with South Korea

Earnings Season to be a Fundamental Support for Stocks

On Tuesday, Chinese president Xi will deliver a speech at the Boao Forum

The dispute weighed heavily on Wall Street last Friday. Dow Jones Industrial Average plummeted 2.3 percent. The S&P 500 lost 2.2 percent, while Nasdaq decreased 2.3 percent.

Analysts are hoping for the quickest quarterly profit growth in seven years, with the earnings season looming large over investors. This could provide some fundamental support for stocks.

Last week, the sovereign debt ended up with some firm footing, supported by the easing up of sentiment and soft report on US payrolls. Yields on US 10-year Treasury debt perked up to 2.797 percent on Monday.

Meanwhile, in the currency markets, the dollar managed to be steady against the yen at 107.00, barely missing the latest six-week peak of 107.49. The yen is considered to be a safe haven for investors in times of geopolitical conflicts and economic disputes.  

The US dollar index, which gauges the greenback’s strength against a basket of six other major currencies, was slightly firmer at 90.184.

The euro steadied at $1.2274 following its bounce from a rock-bottom $1.2212.

For commodities, oil prices climbed up. Brent crude futures for June rose 28 cents to $67.39 per barrel. The US crude jumped 23 cents to $62.29 per barrel.

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