GLOBAL MARKETS-Asia stocks cautious on trade talks; euro under pressure

In This Article:

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Cautious welcome to news of new Sino-U.S. trade meetings

* Nasdaq futures dip as DoJ investigates digital giants

* Dollar firm, euro pressured ahead of ECB policy meeting

* Oil gains on continued Middle East tensions

By Wayne Cole

SYDNEY, July 24 (Reuters) - Asian shares nudged higher on Wednesday amid hints of progress in the Sino-U.S. trade saga, while the dollar hit two-month highs on the euro as investors wagered on a dovish outcome from the European Central Bank's coming policy meeting.

Sentiment had been helped by a Bloomberg report that U.S. Trade Representative Robert Lighthizer would travel to Shanghai next week for meetings with Chinese officials.

White House economic adviser Larry Kudlow on Tuesday called it a good sign and said he expected Beijing to start buying U.S. agriculture products soon.

Japan's Nikkei added 0.4% in early trade, while Australian stocks rose 0.6%. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.04%.

Not so welcome was news the U.S. Justice Department was opening an antitrust investigation of major digital tech firms and possible anticompetitive practices.

The DoJ cited concerns about "search, social media, and some retail services online" -- an apparent reference to Alphabet Inc , Amazon.com Inc and Facebook Inc.

Facebook reports results on Wednesday and Amazon and Alphabet on Thursday.

Nasdaq futures fell 0.45% in early Asian trade, while E-Mini futures for the S&P 500 eased 0.15%.

The news took a little of the gloss off a solid overnight session for Wall Street, where upbeat quarterly reports from Coca-Cola and United Technologies helped ease some concerns about earnings.

The Dow had ended Tuesday up 0.65%, while the S&P 500 gained 0.68% and the Nasdaq 0.58%.

Stocks are just a whisker from all-time highs buoyed by expectations of a wave of policy stimulus by global central banks and a resulting sharp decline in bond yields.

The ECB is thought likely to at least offer a nod to easier policy at its meeting on Thursday.

Futures remain 100% priced for a rate cut of 25 basis points from the Federal Reserve next week, and even imply an 18% chance of 50 basis points.

EURO BREAKS DOWN

The prospect of wide scale central bank largesse helped take the sting out of the IMF's latest downgrade to its global growth forecasts.

While yields on two-year Treasuries edged up to 1.837% overnight, they remain far below the cash rate and down 66 basis points for the year so far.

In currencies, the dollar got a hand up from a deal to end the U.S. budget impasse, while the euro suffered a bout of nerves in case the ECB takes a more dovish turn.