published Sep 12, 2018, 8:46:20 PM, by Adam Haigh and Andreea Papuc
(Bloomberg) —
Asian equities advanced Thursday, putting them on track to end the longest losing streak in 16 years, after news of potential U.S.-China trade negotiations. The dollar steadied after a decline and China’s yuan held gains.

The MSCI Asia Pacific Index climbed after 10 days of losses, with Japanese, Hong Kong and Chinese shares leading the charge. The greenback consolidated after dropping the most in almost three weeks. U.S. stocks ended Wednesday mixed, with chipmakers remaining under pressure. Crude oil pared its biggest two-day increase since June amid signs that global supplies are shrinking and as Hurricane Florence edged closer to the U.S. east coast. Australia’s dollar climbed and bond yields jumped after a surge in August employment.

Markets welcomed the news that Treasury Secretary Steven Mnuchin recently reached out to Beijing to propose another round of talks, just days after President Donald Trump threatened to slap tariff hikes on nearly all goods from China. Still, concern remains, with Goldman Sachs Inc. joining JPMorgan Chase & Co. and UBS AG in warning about the potential fallout from escalating trade tensions. Goldman went so far as to see a bear market in American stocks under a scenario where the U.S. imposed 10 percent tariffs on all imports.

While “this should provide short term relief, the road ahead can still be tricky,” Tai Hui, JPMorgan Asset Management chief market strategist for Asia Pacific, said in an emailed note. “Possible resumption of talks is good and should help to cheer Asian markets after the recent correction. The road to a more sustained resolution is still challenging.”

Elsewhere, the euro was flat alongside the pound ahead of policy decisions from the European Central Bank and the Bank of England. Industrial metals held gains.

Terminal users can read more in our Bloomberg Markets Live blog.

Here are some key events coming up this week:

Policy decisions from the Bank of England, the European Central Bank and in Turkey on Thursday. Australia employment is due Thursday. China releases August industrial production, retail sales data on Friday. U.S. retail sales, industrial production, consumer sentiment on Friday.
These are the main moves in markets:

Stocks

Japan’s Topix index rose 1.2 percent as of 10:35 a.m. in Tokyo. Hong Kong’s Hang Seng Index jumped 1.9 percent. It slipped into a bear market earlier this week. The Shanghai Composite Index was up 0.8 percent. Australia’s S&P/ASX 200 Index fell 0.5 percent. South Korea’s Kospi index added 0.3 percent. S&P 500 Index futures were little changed. The MSCI Asia Pacific Index climbed 0.9 percent.
Currencies

The yen fell 0.1 percent to 111.39 per dollar. The offshore yuan traded at 6.8422 per dollar after rising 0.6 percent. The Bloomberg Dollar Spot Index was flat after dropping 0.5 percent. The Aussie dollar advanced 0.4 percent to 71.95 U.S. cents, adding to a 0.7 percent gain.
Bonds

The yield on 10-year Treasuries was steady at 2.97 percent. Australia’s 10-year bond yield rose two basis points to 2.60 percent.
Commodities

West Texas Intermediate crude fell 0.6 percent to $69.96 a barrel. It jumped 1.6 percent Wednesday. Gold held at $1,205.77 an ounce.

–With assistance from Alexandra Stratton and Aline Oyamada.To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net ;Andreea Papuc in Sydney at apapuc1@bloomberg.net To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net Cormac Mullen
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