Emerging Markets Reach Three-Year High on Optimism over US-China Trade Talks

Korea, Japan, China, India, etc. all rise in unison

US stock futures dip slightly as California situation watched

On the 9th (local time), global stock markets saw Asian markets rally strongly on hopes for a US-China trade meeting and easing tensions between the two countries, while US stock futures edged lower reflecting anxieties in California.

In Korea, the KOSPI rose 1.55% to close at 2,855.77, and the small-cap KOSDAQ index gained 1.06% to 764.21.

Japan's benchmark Nikkei 225 index climbed 0.92% to 38,088.57. The country's first-quarter GDP growth rate was initially expected to fall by -0.7%, but the contraction narrowed to -0.2%.

Mainland China's CSI 300 index gained 0.23%, while Hong Kong's Hang Seng Index added 1.22%. The Hang Seng Tech Index surged 2.39%. India's benchmark Nifty 50 edged up 0.43% and the BSE Sensex gained 0.37%.

The MSCI Asia-Pacific Index rose 1%, while the MSCI Emerging Markets Index climbed 0.9%, reaching its highest level in three years.

US stock index futures, which had finished last weekend with sharp gains, turned slightly lower around 5 a.m. Eastern Standard Time, with the decline attributed to ongoing protests in California. Tensions lingered between state authorities and the federal government under Trump, as S&P 500 and Dow futures fluctuated and Nasdaq futures dipped 0.2%.

The yield on the 10-year US Treasury fell by 2bp to 4.49%. The dollar weakened 0.3% to 144.46 yen, paring Friday's 0.9% rise. The euro rose 0.2% to $1.1417 for the day.

Europe’s STOXX Europe 600 Index showed little movement as of 9 a.m. London time.

Optimism about easing US-China trade tensions spread, particularly in Asia, after reports that China had established fast-track export procedures for rare earths to the US and Europe. China also began taking delivery of commercial jets from Boeing.

China's consumer price index in May fell 0.1% year-on-year, a smaller drop than the expected 0.2% decline. However, China's export growth in May missed forecasts as shipments to the US plummeted.

Last Friday, all three major Wall Street indices surged sharply, as better-than-expected nonfarm payrolls data improved market sentiment.

The US Bureau of Labor Statistics reported on the 6th that 139,000 new jobs were added in May, beating the Dow Jones survey of economists that had forecast 125,000.

This week, on the 11th, the US Consumer Price Index (CPI) for May will be released. Economists expect US companies have started to pass on tariffs to product prices, forecasting a 0.3% monthly and 2.5% yearly increase in the May CPI. Especially, prices for goods and services excluding volatile food and energy items are expected to rise 0.3% in May, bringing the annual increase to 2.9%—the largest in four months.

Jeff Ng, Head of Asia Macro Strategy at SMBC, noted that the market was exhibiting "mixed outlooks" between optimism about trade talks and the US economy and lingering anxieties over California.

Gold traded little changed at $3,311.65 per ounce after falling 1.3% on Friday. US crude oil held steady at $64.54 per barrel after surging 1.9% at the end of last week.

Kim Jung-ah, contributing reporter kja@hankyung.com