(Bloomberg) – US index futures jumped along with stocks in Europe as China raised hopes of progress in trade talks with America this week despite a host of potential headwinds. Gold glided with Treasury.
Contracts on the S&P 500, Dow Jones and Nasdaq 100 indices increased profits following a report that China is still open to a partial trade agreement with the United States. In Europe, technology companies and car manufacturers led a broad-based forward on the Stoxx Europe 600 index. Benchmark stock markets had previously fallen across Asia, except for those in Shanghai and Mumbai. The dollar weakened after two days of profit. Crude oil climbed.
High-level US-Chinese trade talks will resume in Washington on Thursday even as relations between the two countries deteriorate. While a broad agreement seems unlikely, China signaled that it is open to a limited deal, provided no additional duties are imposed by President Donald Trump, according to an official. In return, Beijing would offer non-core concessions such as purchasing agricultural products without giving up on major sticking points, the official said, without providing further information.
On Tuesday, the Trump administration dropped visa bans on some Chinese officials and placed a number of Chinese tech companies on a blacklist. Bloomberg also reported that the White House is continuing discussions about limiting US government pension investment in China.
The recent US-China inflation has overshadowed comments by Federal Reserve Chairman Jerome Powell, who said the central bank will resume purchases of Treasury securities to avoid a repeat of the recent turmoil in the money markets, while hinting at the possibility of further interest rate cuts. Minutes from the Fed's last tax meeting are released tonight, which provides further insight into the decision makers' thinking ahead of their next meeting at the end of the month.
"Judging from this week's US attack on Chinese companies, trade negotiations are underway to prove less constructive than expected, intensifying the risks of global growth," Nema Ramkhelawan-Bhana, an economist at FirstRand Bank in Johannesburg, told clients. "In the absence of fiscal expansion, countries will postpone central banks to curb the blow by providing additional political housing."
Elsewhere climbed the yuan, aided by trade optimism and a stronger-than-expected determination of the daily benchmark Rate. West Texas crude oil rose above $ 53 a barrel. Turkey's lira fluctuated as the country's military began to cross the border into Syria as it had previously warned.
Here are some important events coming up this week:
On Wednesday, minutes will be released from the last political meeting of the Fed's interest rate setting committee. His account of the last meeting of the European Central Bank is due on Thursday. Chinese President Xi Jinping is scheduled to meet with Indian Prime Minister Narendra Modi on Friday and Saturday for an informal summit. The US will release an important measure of inflation on Thursday.
Here are the main movements in the markets:
The Stoxx Europe 600 Index rose 0.4% from 7:08 AM in New York. The S&P 500 index jumped 0.8%. The UK's FTSE 100 index rose 0.5%. The MSCI All-World World Index was slightly changed. MSCI Emerging Market Index fell 0.3%
Bloomberg Dollar Spot Index fell 0.1%. The euro rose 0.2% to $ 1.0983.
The British Pound climbed 0.1% to $ 1.2227.
The Japanese yen weakened 0.3% to $ 107.36 per dollar.
The return on 10-year government bonds gained two basis points to 1.55%. The return on two-year government bonds rose two basis points to 1.44%. Britain's 10-year return increased by three points to 0.448%. Germany's 10-year return climbed three basis points to -0.57%. Japan's 10-year return climbed less than one basis point to -0.2%.
West Texas Intermediate Crude Oil climbed 0.9% to $ 53.10 per barrel. Gold decreased 0.2% to $ 1,502.54 per gram. Iron ore fell 4% to $ 86.10 per tonne.
– With the help of Cormac Mullen and Adam Haigh.
To contact the reporter about this story: Robert Brand in Cape Town at [email protected]
To contact the editors responsible for this story: Christopher Anstey at [email protected], Todd White
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