Markets hold optimism that the U.S. and China will agree to phase one of a trade deal before a Dec 15 deadline for more U.S. tariffs. China’s finance ministry said today it has started to process applications from some domestic companies to exempt their purchases of U.S. agricultural goods, including pork, soybeans and cotton from retaliatory tariffs, a sign that a broader trade agreement is drawing closer.Â
The markets are awaiting today’s U.S. Nov payrolls report for clues to the health of the U.S. economy. Gains in European stocks were limited, and 10-year German bund yields fell after German Oct industrial production unexpectedly fell -1.7% m/m, the biggest decline in 6 months.Â
Asian stocks settled higher as China’s Shanghai Composite closed up +0.43% at a 1-week high and Japan’s Nikkei Stock Index closed up +0.23%. Asian stocks moved higher on optimism a trade deal between the U.S. and China will soon be announced. Gains in Japanese stocks were limited on signs of weakness in consumer spending after Japan Oct household spending fell -5.1% y/y, the biggest decline in 3-1/2 years. The yield on Japan’s 10-year government bond rose to a 9-month high of 0.00% as expectations for additional BOJ stimulus receded after the Japanese government announced a 26 trillion yen ($239 billion) fiscal stimulus package this week.