Stocks in Asia mostly rose Tuesday morning as investors cheered developments on the U.S.-China trade front after a closely watched deadline in early March was postponed.
Japan's Nikkei 225 rose 0.25 percent while the Topix advanced 0.1 percent in early trade. Shares of Japanese conglomerate Softbank Group gained around 0.7 percent.
In South Korea, the Kospi added 0.11 percent even as shares of industry heavyweight Samsung Electronics slipped more than 0.4 percent.
Meanwhile, Australian shares bucked the positive trend as the benchmark ASX 200 slipped 0.86 percent in morning trade. The energy sector declined about 0.7 percent. Oil shares fell after crude dropped more than 3 percent on Monday following a tweet from U.S. President Donald Trump to OPEC that prices were getting too high. Santos declined 2.84 percent, Woodside Petroleum slipped 0.75 percent and Beach Energy shed 0.74 percent.
US-China trade optimism
Overnight on Wall Street, the Dow Jones Industrial Average rose 60.14 points to close at 26,091.95 while the S&P 500 added 0.1 percent to finish its trading day at 2,796.11. The Nasdaq Composite rose 0.36 percent to close at 7,554.46.
Following gains seen elsewhere globally on Monday, U.S. stocks got a boost after President Donald Trump's declaration in a series of tweets that America would delay additional tariffs on Chinese imports originally scheduled for the start of March. He cited substantial progress in bilateral talks between the world's two largest economies.
The news comes after sources familiar with the situation told CNBC last week that the Washington and Beijing are discussing a late March meeting between Trump and Chinese President Xi Jinping in Florida.
While there will be legs to this rally, its important to understand that a final trade agreement could take many forms, Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in a note. The US could promise to keep tariffs where they are (with no further increases) and review them in a few months / years or they could abolish them completely.
There's also a possibility that a deal 'might not happen at all' according to Trump but he's motivated to get it done, she said.
Powell goes to Capitol Hill
U.S. Federal Reserve Chairman Jerome Powell is headed to Capitol Hill later todayto testify before Congress.
Market participants are looking for clues on the Fed's next moves during Powell's appearance, when he will provide prepared remarks followed by question-and-answer sessions. They will be looking for: a commitment to a go-slow approach to future rate hikes, an acknowledgement of the challenges balance sheet reduction poses, and the economic outlook in view of renewed chatter from Fed executives about the weak pace of inflation amid a global growth slowdown.
We do not expect Powell to rule out further rate hikes, though we expect him to suggest higher than expected inflation would be needed to re‑start hikes, Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, said in a morning note.
We also expect Powell to confirm the FOMC will announce a plan to stabilise their balance sheet in coming months. We do not expect Powell's comments to induce a large reaction by the (dollar), Capurso said.
Currencies
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.413 after seeing highs around 96.6 yesterday.
The Japanese yen, considered a safe-haven currency, traded at 111.04 against the dollar after weakening from levels below 110.7 yesterday. The Australian dollar changed hands at $0.7169 after bouncing in the previous session from lows below $0.715.