Asian stocks waver amid US-China trade confusion

• Asian stocks are trading mixed amid confusing trade-related headlines.  
• Nikkei is reporting moderate gains while China’s index is flashing red.  
• FX markets are also lacking a clear directional bias.

Asian equities are lacking a clear directional bias on Friday amid mixed headlines on the US-China trade.

Currently, Japan’s Nikkei is trading 0.5% higher on the day, while China’sA50 index is shedding 0.25%. Stocks in Australia and South Korea are reporting moderate gains, while those in Hong Kong and New Zealand are trading flat to positive.

Meanwhile, the futures on the S&P 500 are adding just 0.15%. The index fell 0.16% on Wednesday on waning trade optimism.

No clear trend is seen in the FX markets with the Japanese Yen trading in a sideways manner against most majors. USD/JPY is currently trading at 108.63 and EUR/USD is flatlined at 1.1063. Elsewhere, gold is reporting marginal gains at $1,465 per Oz and barrel of Brent crude is changing hands at $63.60, representing a 0.6 percent drop on the day.

Wall Street Journal on Thursday reported that Chinese Vice Premier Liu He, during a phone call made late last week, had invited US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing for trade negotiations.

The Journal added further that US negotiators had accepted the invitation. Further, the South China Morning Post cited a source close to the Trump administration as saying that both countries are on the “doorstep” of reaching a deal.

The news flow, however, was not so positive in the first half of the week. Beijing on Wednesday warned retaliation to the US Senate’s move to approve legislation aimed at safeguarding human rights in Hong Kong. Meanwhile, President Trump said that the US will raise tariffs on Chinese goods if the world’s second-largest economy does not agree to a deal he wants.

The latest positive news, however, has so far failed to fuel a notable risk-on rally, possibly because both sides have a history of backtracking on positive comments. Investors, therefore, may be wary of initiating bullish bets.