Asia markets set for a cautious session after US and China concluded trade talks

Asia markets are set for a cautious trading session on Thursday as investors digest the conclusion of trade talks between American and Chinese officials in Beijing.

In Australia, the benchmark ASX 200 was up fractionally in early trade, with most sectors advancing. The heavily-weighted financial subindex, however, slipped 0.18 percent as shares of Australia’s so-called Big Four banks saw losses. Australia and New Zealand Banking Group shed 0.2 percent, Commonwealth Bank of Australia declined 0.46 percent, Westpac slipped 0.12 percent while National Australia Bank was fractionally lower.

Meanwhile, futures pointed to a lower open in Japan. Nikkei futures in Chicago was at 20,280 while its counterpart in Osaka was at 20,300, lower than the main index’s last close at 20,427.06.






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U.S. and China conclude three days of trade talks

The latest round of trade negotiations in Beijing concluded on Wednesday after an unscheduled third day of talks. Officials from Washington said in a statement that they will report back to the White House for further guidance on the talks.

In a statement, the office of the U.S. Trade Representative said that officials discussed “needed structural changes in China” on matters such as forced technology transfers, intellectual property protection and cyber theft. Talks also focused on “China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States,” the statement said.

“Initial signs suggest that there is modest momentum building towards a narrow agreement in coming months, but that US trade hawks are fighting an intense rear-guard action to limit the scope of that agreement and keep the pressure up on Beijing,” analysts at Eurasia Group wrote in a note.

“If a deal is reached, it will almost certainly remain fragile and there will still be a long road ahead of the removal of US tariffs already imposed,” they said.

The world’s two largest economies have been engaged in a trade war since last year, slapping tariffs on billions of dollars worth of each other’s goods. This week’s meeting was closely watched by investors as they assess the impact of the trade spat on corporate profits.

Dow sees fourth straight day of gains

Overnight on Wall Street, the Dow Jones Industrial Average advanced 91.67 points to close at 23,879.12 — its fourth straight day of gains. The S&P 500 also saw a four day winning streak, rising 0.4 percent to finish its trading day at 2,584.96. The Nasdaq Composite gained 0.87 percent to close at 6,957.08.

Wednesday’s moves came after a summary of the Federal Reserve’s December meeting reiterated comments from the central bank’s chairman from last week about patience regarding monetary policy.

The minutes pointed to a backdrop of low inflation in the U.S., meaning the central bank can “afford to be patient about further policy firming.” They also indicated that some Fed officials think a “relatively limited amount” of rate hikes may be coming.

The gains stateside, however, were pared after what appeared to be a poor meeting over the ongoing government shutdown in the U.S. between President Donald Trump and Democratic leadership. The president tweeted the meeting was “a total waste of time. ” Sen. Chuck Schumer said the president walked out of the meeting.


The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 95.141 after seeing an earlier high of 95.920.

The Japanese yen, widely viewed as a safe-haven currency, traded at 108.19 after seeing lows around 108.9 yesterday. The Australian dollar was at $0.7170 after gaining from the $0.714 handle in the previous session.

— Reuters and CNBC’s Fred Imbert contributed to this report.

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