Asian stocks extend gains on trade optimism, earnings

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4%, hitting a near four-year peak

Stocks in Asia extended gains on Thursday as optimism on Wall Street over trade deals and corporate earnings shored up investor confidence across the region, while the euro was steady ahead of European Central Bank policy meeting.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4%, hitting a near four-year peak after U.S. stocks ended the previous session at a record high.

The bullish mood is set to continue in Europe. The pan-European futures were up 1.17%, German DAX futures were up 1.15% and FTSE futures were up 0.39%.

Tokyo’s broad Topix gauge of shares and Singapore’s benchmark index both crossed above previous highs, while the Nikkei 225 extended Wednesday’s gains to within reach of its record high hit last year.

Traders are speculating that the U.S. may soon reach a trade agreement with the European Union, after the Trump administration struck deals with Japan, the Philippines and Indonesia earlier this week.

There’s nothing like a trade deal with a big trading nation – and deals with the Philippines and Indonesia, and the prospect of a deal in the offing for Europe – for markets to throw away all their caution, NAB’s senior market strategist Gavin Friend said on a podcast. Yields are higher and everything seems rosy at the moment.

Markets were relatively subdued after the White House said that U.S. President Donald Trump will visit the Federal Reserve on Thursday, a surprise move that escalates tension between the administration and Chair Jerome Powell. The Fed is expected to hold rates steady next week.

The purpose of Trump’s visit to the Fed is unclear but it may be a move to pressure Powell and the Fed to cut rates and it comes just a few days before the next Fed policy meeting at the end of this month, said Vasu Menon, managing director of investment strategy at OCBC.