(Corrects paragraph 4 to say Australian shares hit 12-year
highs, not all-time highs)
* Cautious welcome to news of new Sino-U.S. trade meetings
* Nasdaq futures dip as Justice Dept investigates digital
giants
* Dollar firm, euro pressured ahead of ECB policy meeting
* Oil gains on inventory draw, Middle East tensions
By Wayne Cole
SYDNEY, July 24 (Reuters) - Asian shares crept higher on
Wednesday as the prospect of fresh Sino-U.S. trade talks drew a
guarded welcome, while the euro hit lows on a range of
counterparts amid speculation the European Central Bank was near
to easing policy.
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 .N225 added 0.3%, while Australian stocks
.AXJO were up 0.7% after hitting 12-year highs. MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gained 0.1% and Chinese blue chips .CSI300
climbed 0.8%.
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 department cited concerns about "search, social media,
and some retail services online" -- an apparent reference to
Alphabet Inc GOOGL.O , Amazon.com Inc AMZN.O and Facebook Inc
FB.O .
Facebook reports results on Wednesday, and Amazon and
Alphabet on Thursday.
Nasdaq futures NQc1 fell 0.3% in Asian trade, while E-Mini
futures for both the S&P 500 ESc1 and EUROSTOXX 50 STXEc1
were all but flat.
The investigation announcement 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. .N
The Dow .DJI had ended Tuesday up 0.65%, while the S&P 500
.SPX gained 0.68% and the Nasdaq .IXIC 0.58%.
Stocks are just a whisker away 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 FEDWATCH 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. Although yields on two-year Treasuries US2YT=TWEB 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.
The single currency was down near two-month lows at $1.1144
EUR= , having shed 0.5% overnight. It also hit a near
seven-month trough on the yen at 120.45 EURJPY= and a two-year
low on the Swiss franc EURCHF= .
The dollar was steady on the yen at 108.13 JPY= , and near
a five-week top on a basket of currencies at 97.735 .DXY .
Sterling loitered at $1.2440 GBP= having fallen for three
sessions in a row as the outlook on Brexit got ever murkier.
Boris Johnson is set to become Britain's new prime minister
later on Wednesday, but investors are no clearer on whether he
would lead the country to a no-deal exit or find a compromise.
"We may see more market volatility if the EU refuses to
renegotiate the existing UK withdrawal agreement," said BNY
Mellon's fixed income portfolio manager Howard Cunningham.
"There is scope for sterling to weaken further," he added.
"It is also possible it could match some of the lows it hit just
after the EU referendum in 2016 if there is no sign of movement
from either side in any further withdrawal negotiations."
Gold steadied at $1,420.59 per ounce XAU= , though it was
still short of last week's peak at $1,452.60.
Oil prices firmed after an industry group reported a
surprisingly large drop in U.S. inventories, while the U.S. Navy
said it may have downed a second Iranian drone last week. O/R
Brent crude LCOc1 futures added 21 cents to $64.04, while
U.S. crude CLc1 rose 21 cents to $56.98 a barrel.
(Editing by Simon Cameron-Moore and Richard Borsuk)