SYDNEY: Stocks rallied and bonds retreated in Asia on Monday as a thaw in the Sino-U.S. trade dispute averted one threat to the global economy, leading investors to pare wagers on aggressive policy easing by the major central banks.
The initial reaction was one of relief that new tariffs were avoided and Japan's Nikkei climbed 1.6 per cent to a two-month top. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.4 per cent. The United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met at the sidelines of the G20 summit in Japan over the weekend. These included no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing.
"As such, it is likely that soft manufacturing conditions will persist until if and when a fuller agreement is fleshed out."
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