Trade talks, stimulus boost Asia shares

Investors will look for progress on continued China-US trade talks this week in Washington.
Investors will look for progress on continued China-US trade talks this week in Washington.

Asian share markets have firmed as investors dared to hope for progress on this week's Sino-US trade talks and policy stimulus from major central banks.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 per cent on Monday, partially recovering from a sharp fall on Friday.

Japan's Nikkei climbed 1.6 per cent to hit its highest point of 2019, while Australia's main index rose 0.7 per cent. E-Mini futures for the S&P 500 were flat, with trade thinned by a holiday in US markets.

The Dow and Nasdaq had boasted their eighth consecutive weekly gains on wagers the United States and China would hammer out a trade agreement.

The two sides will resume negotiations this week, with US President Donald Trump saying he may extend a March 1 deadline for a deal. Both parties reported progress in five days of talks in Beijing last week.

Those talks will continue in Washington this week.

"That does not rule out a setback or two between now and the start of March," CBA analysts said in a note.

"Even so, we still think that both sides have good reasons to want to get to an agreement. And, so motivated, it makes an agreement more likely than not."

There are also growing expectations of more reflationary policies from some of the world's more powerful central banks.

Data out last week showed China's banks made the most new loans on record in January as policymakers tried to jump-start sluggish investment.

Minutes of the US Federal Reserve's last policy meeting are due on Wednesday and should provide more guidance on the likelihood or not for rate hikes.

The European Central Bank's Olli Rehn told a German newspaper on Sunday that recent data point to a weakening euro zone economy and interest rates would remain at the current level until monetary policy goals have been met.

The single currency was last at $US1.1290 and still within the $1.1213/1.1570 trading range that has held since mid-October.

The dollar was steady on the yen at 110.50.

Sterling was a shade firmer at $US1.2901 ahead of Brexit talks between British Prime Minister Theresa May and European Commission President Jean-Claude Juncker this week.

Oil prices were at their highest for the year so far this year after an outage at Saudi Arabia's offshore oilfield boosted expectations for tightening supply.

US crude was last up 30 cents at $US55.89 a barrel.

Australian Associated Press