Sydney: An equity rally spread from the U.S. into Asia after a dovish tone from the Federal Reserve Chairman Jerome Powell fueled speculation the central bank may pause lifting interest rates next year. The dollar maintained its retreat. Stocks from Sydney to Hong Kong rose, though gains were more muted than the stellar rally in the S&P 500 Index, which surged the most since March. Emerging-market equities climbed to the highest level since early October and earlier the Nasdaq 100 jumped 3.2 percent. The Bloomberg Dollar Index held steady after sinking the most in two weeks, when two-year Treasury yields dipped.

Powell’s comment that interest rates are “just below" a range of estimates of the so-called neutral level tempered remarks made last month that markets read as a signal of more aggressive monetary policy tightening. Investors are now betting the Fed is nearing a pause in hikes and eurodollar futures show the market pricing for just 25 basis points, the equivalent of one Fed increase, next year.

“He’s taking away the concern about aggressive interest-rate increases, which resolves one of the issues that hung over the markets during the last couple of months," Bob Phillips, managing principal at Spectrum Management Group, said in an interview. “We still have the trade war issue with China and we’ll see how that works out this week. If that comes out positive, we’ll have a decent rally at the end of the year."

That meeting between the U.S. and Chinese presidents will take place at the Group of 20 summit in Buenos Aires this weekend, with U.S. President Donald Trump threatening tariffs on $200 billion of Chinese goods unless they can strike a deal on revised terms of trade. Global economic growth may be slowing more than expected, the IMF warned. Recent data suggest the situation has only worsened since the fund trimmed its world GDP forecast last month, according to a report prepared for the G-20 meetings.

“The next catalyst will be the G-20 meeting between Trump and Xi; we believe risk assets will tactically trade in the green following a tariff cease-fire," Eleanor Creagh, a strategist at Saxo Capital Markets in Sydney, said. “A tradable risk bounce on a paper deal at G-20 will be unlikely to reverse sentiment structurally as the underlying U.S.-China relationship is still deteriorating."

Elsewhere, the pound held gains after reversing losses sparked by the Bank of England’s warning that a no-deal Brexit could spark a recession. Oil recovered some of its losses after an unexpectedly large increase in U.S. crude inventories spurred declines Wednesday, adding to worries about a supply glut ahead of a meeting between top exporters Russia and Saudi Arabia.

Stocks

Japan’s Topix index climbed 0.8 percent as of 10:30 a.m. South Korea’s Kospi index rose 1 percent. Hong Kong’s Hang Seng added 0.8 percent. The Shanghai Composite gained 0.5 percent. Australia’s S&P/ASX 200 Index advanced 0.6 percent. Futures were little changed on the S&P 500, which gained 2.3 percent Wednesday and the Nasdaq 100 rose 3.2 percent.

Currencies

The yen added 0.1 percent to 113.55 per dollar. The offshore yuan was steady at 6.9405 per dollar. The Bloomberg Dollar Spot Index ticked higher after falling 0.6 percent. The euro bought $1.1368. The British pound traded at $1.2824.

Bonds

The yield on 10-year Treasuries dipped one basis point to 3.05 percent. Australia’s 10-year bond yield held at 2.62 percent.

Commodities

West Texas Intermediate crude gained 1.2 percent to $50.91 a barrel. Gold was steady at $1,221.83 an ounce.

(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)

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