Asian shares gain on U.S.-Mexico trade optimism

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Asian shares advanced again on Tuesday while major currencies held on to gains as the U.S. and Mexico made a deal to overhaul the North American Free Trade Agreement.

Oil prices were buoyant, with Brent up 25 cents to 76.46 dollars a barrel and U.S. crude rising 19 cents to 69.07 dollars.

Investors expect Canada too would agree to the new terms to preserve a three-nation pact, ultimately dispelling the economic uncertainty caused by U.S. President Donald Trump’s repeated threats to ditch the 1994 NAFTA accord.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.3 per cent for a second straight day of gains. Australian shares added 0.5 per cent while Japan’s Nikkei jumped 0.8 per cent.

New York’s S&P 500 and Nasdaq indexes hit record highs and bond yields rose, while prices for copper, considered a barometer of global growth, climbed.

Investors will keep an eye on U.S. economic data with consumer confidence figures due later in the day and the latest estimate for second-quarter gross domestic product expected on Wednesday.

“The NAFTA agreement is clearly a positive to the extent that it reduces the risk of a generalized global trade war,” JPMorgan analysts said in a note.

The dollar index paused near one-month lows against major currencies to be last at 94.762.

Against the yen, the greenback held at 111.20.

The euro held near a one-month top at 1.1680 dollars.

The Australian dollar, which is often used as a liquid hedge for global growth, hovered around 0.7345 dollars to stay well above a trough of $0.7248.

The Chinese yuan held near a four-week high to the dollar , a day after the country’s central bank took steps to support the currency.

Commodity markets showed signs of optimism in global economic growth prospects. Copper, a favoured indicator of industrial momentum, held near a two-week high of 6,112.00 dollars a tonne.

Gold too was firm too with spot prices at 1211.36  dollars an ounce.