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Asia: Markets gain as earnings reports loom
[HONG KONG] Asian markets advanced Tuesday as investors turn their attention to this week's release of corporate earnings reports while tensions persist over a potential global trade war.
European Commission President Jean-Claude Juncker heads to Washington on Wednesday to meet with President Donald Trump and try to avert an escalation of tit-for-tat trade tariffs.
The US leader is already embroiled in a messy trade spat with China and Europe, while negotiations with Canada and Mexico to revamp the North American Free Trade Agreement have stalled.
Mr Trump's complaints about the Federal Reserve interest rate hikes and a strong dollar saw the US currency fall late last week but the decline was unlikely to continue, analysts said.
"The market has clearly made the determination that it does not need to take notice of President Trump's disquiet over the dollar's strength because the Fed is likely to stay its course and the US economy remains strong", said Greg McKenna, chief market strategist at AxiTrader.
Focus has also shifted to a round of earnings reports expected this week from companies ranging from British pharma giant GlaxoSmithKline to Japanese automaker Mitsubishi Motors to US aerospace titan Boeing.
Tech firms Amazon and Facebook will also report their results later in the week.
Tokyo added 0.6 per cent while Hong Kong advanced 1.2 per cent and Shanghai jumped 1.5 per cent. The gains were mirrored across Asia, with Seoul rising 0.2 per cent and Singapore climbing 0.3 per cent.
OIL GLUT FEARS
Oil prices fell after getting a lift on Monday when Mr Trump and Iranian President Hassan Rouhani engaged in a round of furious sabre-rattling.
Mr Trump's tweet - all in capital letters, the digital equivalent of shouting - came after Rouhani warned the US leader on Sunday not to "play with the lion's tail", saying that conflict with Iran would trigger the "mother of all wars".
Mr Trump responded: "NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE."
But the boost to oil markets was short-lived.
"While oil prices were the primary beneficiary of the weekend's headline battle between President Trump and Iranian President Rouhani, that boost started to fizzle as traders then veered to oversupply concerns," said Stephen Innes, head of Asia-Pacific trading at Oanda trading group.
"The broader macro picture continues to loom large as Saudi Arabia and Russia are expanding production to offset the loss of Iran production in November," Mr Innes added.