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US stock futures gain as Trump delays tariffs

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US equity futures rose and the yen dipped after President Donald Trump said he will delay the next tariff increase on China by about two weeks.

[SYDNEY] US equity futures rose and the yen dipped after President Donald Trump said he will delay the next tariff increase on China by about two weeks.

Asian shares looked set to follow an advance on Wall Street, as investors awaited a potentially pivotal European Central Bank policy meeting.

S&P 500 futures advanced about 0.3 per cent and the yuan edged higher. Treasury futures dipped. Futures were already pointing higher in Japan and Australia.

Earlier, the S&P 500 climbed to the highest since July, as tech and healthcare shares climbed, with the recent trend of rotation to value from momentum stocks easing. Oil steadied after dropping amid signs there could be a thaw in US-Iran relations following John Bolton's departure.

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Investor focus has shifted to central banks with the European Central Bank's policy meeting on Thursday, where it is widely expected to lower interest rates and potentially offer more stimulus.

With the Fed meeting next week, strong monetary easing is not a given, with some dialing back their expectations of accommodation and bond traders pulling back from the more bullish sentiment of August.

President Donald Trump earlier urged the Fed to cut interest rates to "zero, or less," in a tweet.

"The equity market is suggesting we are going to have lower interest rates for a longer period of time and we've seen that through rotation," Gina Martin Adams, chief equity strategist for Bloomberg Intelligence, told Bloomberg TV in New York.

"There is a risk that if the Fed disappoints that we see the market rotation continue pretty viciously."

The ECB policy meeting Thursday is widely expected to see a cut to interest rates and a review of all options, including QE. Policy makers will also publish forecasts for growth and inflation. ECB President Mario Draghi will hold a press conference.

US data for August is due on producer prices Wednesday, and CPI Thursday.

Stocks

Futures on the S&P 500 Index gained 0.4 per cent as of 8.25am in Tokyo. The underlying gauge rose 0.7 per cent on Wednesday.

Futures on Japan's Nikkei 225 added 0.5 per cent. Hang Seng futures were flat earlier.

Futures on Australia's S&P/ASX 200 Index rose 0.4 per cent.

Currencies

The yen was at 107.81 per US dollar.

The offshore yuan held at 7.1077 per US dollar.

The Bloomberg Dollar Spot Index was little changed.

The euro bought US$1.1011.

Bonds

The yield on 10-year Treasuries added less than one basis point to 1.74 per cent. Australia's 10-year yield remained at 1.14 per cent.

Commodities

West Texas Intermediate crude added 0.4 per cent to US$55.95 a barrel.

Gold was flat at US$1,497.04 an ounce.

BLOOMBERG