SYDNEY, Oct 29 ― Asian shares scaled a three-month high today after Wall Street hit all-time peaks amid hopes of progress in Sino-US trade talks and for another dose of policy stimulus from the Federal Reserve this week.

Japan's Nikkei led the way with a rise of 0.6 per cent to reach ground last trod a full year ago. MSCI's broadest index of Asia-Pacific shares outside Japan crept up 0.2 per cent in early trade to its highest since late July.

E-Mini futures for the S&P 500 extended their gains by 0.1 per cent.

US President Donald Trump said yesterday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing.

The US trade representative also said they were studying whether to extend tariff suspensions on US$34 billion (RM142 billion) of Chinese goods set to expire on December 28 this year.

"The market appears to be interpreting the improvement in trade talks as a positive sign that the US will suspend its planned tariffs on US$160 billion of Chinese imports due to take place in December,” said Rodrigo Catril, a senior FX strategist at National Australia Bank.

"This is a big assumption as talks could easily fail again if both parties don't find a compromise.”

On Wall Street, the S&P 500 gained 0.56 per cent to score a record closing peak, while the Dow rose 0.49 per cent and the Nasdaq 1.01 per cent.

Microsoft Corp climbed 2.46 per cent after winning the Pentagon's US$10 billion cloud computing contract, beating out Amazon.com Inc.

Google parent Alphabet Inc slipped in late NY trade after missing analysts' estimates for quarterly profit even though revenue growth topped expectations.

Hanging on the Fed

The embrace of risk left bonds out in the cold, and yields on two-year Treasury notes hit four-week highs at 1.667 per cent.

Bond investors are still looking forward to a likely rate cut from the Federal Reserve tomorrow, though they also suspect officials might sound cautious on moving yet further.

"Some/many Fed participants may think/hope that the October cut will be the last of this cycle,” Michelle Girard, chief US economist at NatWest Markets, said in a report.

"However, we expect weaker data over the coming months and quarters will force the Fed to lower rates further. We look for rate cuts in October, December, March, and June, dropping the fed funds target range to 0.75 per cent -1.00 per cent by the middle of 2020.”

That view is even more aggressive than the futures market, which has 50 basis points of cuts priced in by June.

Central banks in Japan and Canada also meet this week, with talk the former might ease further if only to prevent an export-sapping bounce in its currency.

The shift from safe havens was working to weaken the yen. The dollar was firm at ¥108.98, having reached its highest in three months, and was eyeing a major top at 109.31.

It fared less well on the euro, which edged up to US$1.1097 , and eased back on a basket of currencies to 97.756 .

Sterling firmed after the European Union agreed to a Brexit delay of up to three months, while Prime Minister Boris Johnson lost a vote to force an election on December 12.

The pound was last at US$1.2858, well above its low for the month at US$1.2193.

Spot gold slipped back to US$1,491.43 per ounce, and away from last week's top around US$1,517.

Oil prices steadied after taking a knock from signs of rising US stockpiles.

Brent crude futures firmed 12 cents to US$61.69, while US crude added 3 cents to US$55.84 a barrel. ― Reuters