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Asian stock markets : https://tmsnrt.rs/2zpUAr4

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Nikkei climbs as Takaichi nearer to PM job

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China Q3 economic growth slows to 4.8% y/y, but 1.1% q/q

tops

forecasts

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Wall St futures up on hopes for solid earnings

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Bonds underpinned by expectations of multiple Fed cuts

(Adds China GDP data, Trump comments, updates prices)

By Wayne Cole

SYDNEY, Oct 20 (Reuters) - A jump in the Nikkei led

Asian markets higher on Monday as Japan looked close to

installing a new prime minister, while a reading on U.S.

inflation this week is expected to be no more than a speed bump

on the way to further rate cuts there.

Data showed China's economy grew 1.1% in the third quarter,

to top forecasts, while industrial output also beat with a rise

of 6.5%, which could reinforce Beijing's determination to fight

a lengthy trade war with the United States.

But on an annual basis, its 4.8% growth marked the weakest

pace in a year.

And, a continued fall in Chinese home prices showed the

property sector remained a big drag on the economy, household

wealth and spending, with retail sales up a modest 3.0% on the

year.

Investors are hoping from more stimulus as policymakers

convene this week to discuss the latest Five-Year Plan, though

markets have got used to being disappointed.

U.S. President Donald Trump told reporters he could lower

tariffs on China as long as Beijing did "things" for the United

States too, including resuming purchases of soy beans.

Figures due on Friday are expected to show U.S. core

inflation held at 3.1% in September, but should not trouble

markets given the Federal Reserve has not pushed back against

pricing for cuts.

"Chair Powell has highlighted the importance of signs of a

weakening job market in the Fed's policy considerations," said

Michael Feroli, head of U.S. economics at JPMorgan. "That

confirmed widely held expectations that the FOMC will cut rates

again at its next meeting in just over two weeks."

Futures are fully priced for a quarter-point easing this

month, and another in December, with rates seen reaching 3.0% by

the middle of next year.

Japan's Nikkei led Asia higher with a jump of 2.8%

encouraged by news the Liberal Democratic Party and the Japan

Innovation Party have agreed to form a coalition government,

setting the stage for the country's first female prime minister.

Analysts assume Sanae Takaichi would be pro-stimulus and

against further hikes in interest rates, a negative for the yen

and bonds but a plus for equities.

Shares in South Korea added 1.0%, while MSCI's

broadest index of Asia-Pacific shares outside Japan

firmed 1.3%.

Chinese blue chips gained 1.0%, having lost ground

last week.

EUROSTOXX 50 futures added 0.6%, while DAX futures

firmed 0.6% and FTSE futures 0.2%.

For Wall Street, both S&P 500 futures and Nasdaq

futures rose 0.2%, with much riding on how earnings

unfold this week.

HIGH EXPECTATIONS FOR EARNINGS

S&P 500 companies overall are expected to have increased

earnings by 8.8% in the third quarter from a year earlier,

according to LSEG IBES, and strong results will be needed to

justify the market's lofty valuations.

B0fA analyst Savita Subramanian is tipping earnings growth

of 11%, led by a 20% rise in the tech sector and Nvidia alone

driving a quarter of growth in total earnings per share.

Reports include Tesla, Ford, GM,

Netflix ( NFLX ), Procter & Gamble ( PG ) and Coca-Cola,

along with aerospace and defence giant RTX and tech

stalwarts IBM ( IBM ) and Intel ( INTC ).

The UK also has major banks reporting this week while

software giant SAP will make a splash in Germany.

The prospect of a series of Fed rate cuts has underpinned

bonds, with 10-year yields falling almost 14 basis

points last week to currently stand at 4.011%.

The slide in yields has pressured the dollar against

European and higher-yielding currencies, with the euro at

$1.1656 having edged up 0.3% last week despite a

surprise credit downgrade of France.

The yen had its own problems as investors have scaled back

pricing for a Bank of Japan rate hike this month to just 22%,

with a move in December put at 50-50.

The dollar was up 0.3% at 151.06 yen, while the

euro made similar gains to 176.23. The dollar index

was flat at 98.543.

In commodity markets, gold remained in high demand after

jumping almost 6% last week to as far as $4,378.69. The metal

was trading at $4,263 an ounce, with $4,200 now acting as

chart support.

"On a three-year horizon, we believe that there is more room

for gold prices to rise, eventually reaching a target of $5,000

an ounce in 2028 due to a structural change in demand for the

metal by investors and central banks," said Lorenzo Portelli,

head of cross-asset strategy at Amundi Investment Institute.

Oil prices continued to be weighed by ample supplies as

OPEC+ keeps raising its output.

Brent eased 0.4% to $61.02 a barrel, while U.S.

crude dropped 0.5% to $57.24 per barrel.