Asian markets headed higher on Monday as traders once again expressed optimism about what they hope will be a new trade deal between the United States and China in the coming days. According to reports by Reuters, the countries are close to a deal that would reverse U.S. tariffs on at least $200 billion of Chinese goods. In the deal, China would promise structural economic changes and would cancel plans for tariffs on U.S. goods. China would also purchase $18 billion of natural gas from Cheniere Energy Inc., a plant based in Houston, according to the Wall Street Journal. U.S. President Donald Trump and Chinese President Xi Jinping could confirm a deal as early as March 27. Rumors of a meeting between the world leaders at Trump’s Mar-a-Lago retreat were also swirling on Sunday, though no exact date has been set.
Most major Asian indexes were higher on Monday afternoon, with the Shenzhen Composite leading the gains, trading up 1.92 percent as of 2:55 p.m. HK/SIN. Japan’s Nikkei 225 was up 1.02 percent to hit new three-month highs, while the Shanghai Composite and Hong Kong’s Hang Seng Index were bot 0.58 percent higher. Only South Korea’s Kospi was trading lower, down 0.22 percent.
Despite renewed optimism, skeptics are concerned that Trump could abandon a trade deal at any moment if he is not entirely satisfied with the terms. Citing Trump’s abrupt cancellation of his meeting with North Korean leader Kim Jong Un last week, pessimists argue that Trump is quick to retreat when things don’t go his way.
Currency Movements
The dollar index was lower in the mid-afternoon on Monday, down 0.10 percent to 96.42 .DXY. The dollar firmed against the yen, up 0.04 percent to 111.94, but it eased against the pound, which has continued to strengthen on expectations that the Brexit will be delayed. The pound gained 0.19 percent against the greenback, to trade at $1.3226. The euro eased against the dollar, down 0.08 percent to $1.1365.