Asian investors extended a rally on Tuesday (Aug 28), tracking another Wall Street record as they cheered a fresh trade deal between the United States and Mexico - ending one row picked by Donald Trump that had rattled global markets.
The agreement raises hopes the North American Free Trade Agreement, rejected by the White House soon after Trump’s election, can be salvaged after Canada rejoins talks on Tuesday.
The pact was described by the US president as “a big day for trade” and it sent the S&P 500 and Nasdaq to fresh all-time highs, while the Dow broke 26,000 for the first time since January.
Mizuho Securities said in a note to clients that investors are monitoring “the US-Canada negotiations and the impact on US-China trade talks”.
Monday’s agreement comes after officials from Washington and Beijing held talks last week aimed at easing trade tensions that have seen them hit each other with tariffs on tens of billions of dollars worth of goods.
While the meeting did not achieve any breakthrough, the fact it took place was seen as a good sign. Stephen Innes, head of Asia-Pacific trading at OANDA, said dealers were “in a festive mood” as the deal removed “one major hurdle that has been haunting North American investors for months”. He added, “Markets are revelling in any trade positive, after all, a deal is a deal.” Channel NewsAsia
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