Asian shares hit their highest in almost 8 months on Monday after the U.S. and China agreed on the preliminary trade deal, with Australian shares leading the way in which on expectations of more easing of financial policy there.
European shares had been set to build on the last week’s gains. In early European trades on Monday, pan-region Euro Stoxx 50 futures had been up 0.62%, German DAX futures had been 0.5% higher, and FTSE futures rose 0.6%.
U.S. stock futures additionally pointed to stronger gains to start out the week, with the S&P 500 e-minis up 0.27%.
On Sunday, U.S. Trade Representative Robert Lighthizer stated deal was “totally done,” however, some wanted revisions and would almost double U.S. exports to China over the next two years.
Positive sentiment has helped to push the MSCI’s broadest index of Asia-Pacific shares outside Japan to its highest level since April 18. It was last up by 0.25%. Australia’s S&P/ASX 200 led the way in which it jumped 1.63%, whereas shares in Taiwan added 0.22%.
Ryan Felsman, the senior economist at CommSec in Sydney, stated the trade deal and the receding risk of a disorderly Brexit after the U.K. general election produced a strong Conservative majority offered help for sentiment in Australia.
Chinese investors initially had a more tepid response to the trade news, with the blue-chip CSI300 index struggling to rise further after trade hopes fanned a close to 2% rise on Friday.
Oil costs, which had risen on Friday following the deal, cooled in early Asian trade on Monday. Brent crude shed 0.31% to $65.02 per barrel, and U.S. West, Texas Intermediate crude, was down 0.37% at $59.85 per barrel.