Asian stocks rose, building on gains in global shares amid optimism over progress on the US-China trade front and indications of more stimulus from the European Central Bank. Treasuries steadied and Japanese government bonds advanced.
Shares in Hong Kong led the advance, with the Hang Seng Index up as much as 2.6%, with Japanese and South Korean equities also higher. That comes on the back of a strong US session after President Donald Trump tweeted he will meet Chinese President Xi Jinping at the G-20 summit next week. Ten-year Treasury yields nudged higher and were at 2.06% after coming close to touching 2% in the prior session. Japan’s 10-year yield dropped to minus 0.15%, near the lower end of the Bank of Japan’s target range.
Next up is the Federal Reserve, which is widely expected to strike a more dovish tone when it concludes a two-day meeting Wednesday. Meanwhile, German 10-year yields tumbled further below zero as ECB President Mario Draghi said officials are ready with stimulus if needed, adding to expectations for easier global conditions. That helped bring the stockpile of negative-yielding bonds globally to a record $12.5 trillion.
Trump said Tuesday that he had a “very good” phone conversation with Xi. The two leaders will hold an “extended meeting” at the G-20 summit on June 28-29 in Osaka and “our respective teams will begin talks prior to our meeting,” Trump said on Twitter.
Elsewhere, oil remained higher after surging Tuesday for its biggest gain in five months. OPEC and its allies moved closer to a meeting to extend supply cuts while Draghi’s comments raised hopes for increased demand.