* Asian shares higher on trade deal optimism, Europe to
track rise
* Investors remain on edge amid mixed messages from Trump
* Oil eases slightly before OPEC meeting
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Stanley White and Noah Sin
TOKYO/HONG KONG, Dec 5 (Reuters) - Stock markets in Asia
inched up on Thursday on the possibility that China and the
United States may soon seal a "phase one" deal to end their
17-month trade war, but conflicting messages from U.S. President
Donald Trump kept a lid on the advance.
European shares are set to follow with a slightly firmer
open, with the pan-regional Euro Stoxx 50 futures .STXEc1 and
London's FTSE futures .FFIc1 rising 0.1% in early trade.
Hopes that an agreement would soon emerge stemmed from a
Bloomberg report on Wednesday that the two sides were close to a
"phase one" deal, and Trump's remarks that the talks were going
"very well" after he had earlier said it might take until late
2020 to reach an accord.
"My base case scenario is the two sides reach some deal. The
pressure for a deal is immense simply because of the economic
slowdown in both countries," said Shane Oliver, head of
investment strategy and chief economist at AMP Capital Investors
in Sydney.
"However, we see increased volatility because policy
uncertainty has become a constant."
As investors tilted towards optimism, riskier assets rose
and safe havens such as the Japanese yen weakened.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gained 0.5%. Japan's Nikkei stock index .N225
rose 0.7%, Australian shares .AXJO were up 1.2%, and in China,
blue chips .CSI300 climbed 0.7% and Hong Kong's Hang Seng
index .HSI eked out gains of 0.4%.
HSBC Global Research said in a note on Wednesday analysts'
consensus estimates of Asian companies' earnings forecasts were
revised up for the first time in 18 months, and that similar
turning points in recent years had paved the way for stock
market recoveries.
But more market turbulence is possible in the short term
given Sino-U.S. negotiations are very fluid.
If China and the United States cannot reach an agreement
soon, the next important date to watch is Dec. 15, when
Washington is scheduled to impose even more tariffs on Chinese
goods.
Traders are also bracing for the closely-watched U.S.
non-farm payrolls report due Friday to determine how well the
U.S. economy is holding up amid a global slowdown.
Trading will likely be thin and there will be little money
chasing these unpredictable trade headlines as the year-end
approaches, said Robert Carnell, chief economist and head of
research for Asia-Pacific at ING in Singapore.
"The motivation now (for investors) is not to lose any money
if you're under water, and if you've made money, keep it that
way," he said. "If you haven't positioned yet you are not going
to in the next couple of weeks."
The yen JPY= traded down 0.07% at 108.77 per dollar,
ceding some of the previous day's gains as positive signs about
the trade dispute hurt demand for safe-haven currencies.
The yield on benchmark 10-year Treasury notes US10YT=RR
fell slightly to 1.7603% in Asia, retracing some of the gains
made in the previous session.
U.S. crude CLc1 edged 0.25% lower to $58.18 a barrel on
Thursday as a 3% rally overnight showed signs of fading.
However, prices could be supported if the Organization of
the Petroleum Exporting Countries, and fellow producers
including Russia, approve deeper crude output cuts when they
meet in Vienna on Thursday and Friday.
HSBC chart on Asia earnings Dec 5, 2019 https://tmsnrt.rs/2RkYIC0
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(Editing by Simon Cameron-Moore and Jacqueline Wong)