Asian stocks meander ahead of Trump-Xi talks, US jobs data

Stocks bounced back from Wednesday's sharp selloff but gave back some gains after comments from President Donald Trump.VIDEO: REUTERS
An investor looks at an electronic board showing stock information at a brokerage house in Shanghai.
An investor looks at an electronic board showing stock information at a brokerage house in Shanghai.PHOTO: AFP

SINGAPORE (REUTERS) - Asian stocks drifted early on Friday (April 7) after Wall Street and the US dollar clocked tentative gains, with markets cautious over the talks between the US and Chinese presidents and US employment data later on Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat, headed for a 0.2 per cent weekly increase.

Japan's Nikkei added 0.8 per cent early on Friday after touching a four-month low on Thursday. It's set to post a 0.85 per cent loss for the week.

The MSCI World index is down 0.4 per cent for the week.

Overnight, Wall Street edged up between about 0.1 per cent and 0.25 per cent after data showed US unemployment benefit claims recorded their biggest drop in nearly two years.

The dollar added almost 0.1 per cent to 110.90 yen early on Friday, extending Thursday's 0.1 per cent gain.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, was modestly higher at 100.72.

Despite five straight sessions without losses, it is up less than 0.4 per cent for the week, amid nervousness about US non-farm payrolls data for March, due later in the session, with economists predicting job gains will be smaller than in February.

Traders are also looking with trepidation to Friday's meeting between US President Donald Trump and his Chinese counterpart Xi Jinping, who met face-to-face for the first time on Thursday for some social time and dinner at Trump's Mar-a-Lago resort in Palm Beach, Florida.

On Friday, they're set to tackle thorny issues including trade and security.

Markets' main concern is that Trump and Xi may not see eye-to-eye on most things and that traders will infer this from their body language, said Thierry Albert Wizman, global interest rates and currencies strategist, at Macquarie Group in New York.

"Rather than a lack of agreement, however, the greater risk is a lack of deep engagement," he said.

The euro was steady at US$1.06435 in early trade on Friday, failing to recover any of Thursday's 0.2 per cent loss following comments by the European Central Bank head that he sees no need to deviate from the ECB's stated policy path at least until the end of the year.

Mario Draghi also said record-low rates could remain until well after that to stimulate inflation.

The embattled South African rand steadied ahead of a vote of no confidence in President Jacob Zuma on April 18.

Three cabinet ministers removed by Zuma from their posts in a reshuffle last week quit as lawmakers of his African National Congress on Thursday.

The rand has slumped about 11 per cent versus the dollar from a March 27 high. It was down about 0.2 per cent on Friday, after a 0.35 per cent gain on Thursday.

In commodities, oil prices were mixed, as analysts and investors remained cautious about record-high US crude inventories.

US crude was steady at US$51.70 a barrel, retaining Thursday's 1 per cent gain, and is set to end the week 2.2 per cent higher.

Global benchmark Brent slipped 0.1 per cent to US$54.83, on track for a 3.8 per cent weekly rise.