TOKYO, May 21 2018 : U.S. stock futures jumped today as U.S. Treasury Secretary Steven Mnuchin said the U.S. trade war with China is “on hold” after the world’s two largest economic powers agreed to drop their tariff threats while they work on a wider trade agreement.
S&P mini futures rose 0.6 percent in early Asian trade today.
Investors trading Asian stocks were cautious. Japan’s Nikkei .N225 ticked up 0.1 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.1 percent in early trade.
Mnuchin and U.S. President Donald Trump’s top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday set up a framework for addressing trade imbalances in the future.
U.S. bond yields rose as safe-haven demand for debt fell, with the 10-year Treasuries yield rising 1.5 basis points to 3.082 percent, near a seven-year high of 3.128 percent hit on Friday.
“We expect more selling until the next Fed’s meeting in June,” he said.
In the currency market, higher U.S. yields helped to strengthen the dollar against a wide range of currencies.
The euro dipped 0.1 percent to $1.1756 EUR=, hovering above Friday’s five-month low of $1.1750.
The common currency was also hit after two anti-establishment parties pledged to increase spending in a deal to form a new coalition government.
The dollar maintained an uptrend against the yen, rising 0.25 percent to fetch 111.01 yen, JPY=, close to Friday’s four-month high of 111.085.
Oil prices held firm near 3-1/2-year highs after Venezuelan leader Nicolas Maduro appeared to be set for re-election, an outcome that could trigger additional sanctions from the United States and more censure from the European Union and Latin America.
Oil prices have been supported by plummeting Venezuelan production, in addition to a solid global demand and supply concerns stemming from tensions in the Middle East.