Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Hopes of a trade agreement between the US and China are gripping the markets today.
After three days of negotiations, talks between the two sides in Beijing have just concluded – and there’s real optimism of a breakthrough.
China’s Foreign Ministry spokesman Lu Kang has just told a daily news briefing on Wednesday that trade talks have concluded and the results will be released very soon.
Lu added that the “longer-than-expected” talks show that China is very serious about getting a deal. Officials had expected to wrap up on Tuesday, but surprised observers by returning to the negotiating table for a third day.
The two countries need to reach a deal before March 1, else the US will hike tariffs on some $200 billion in Chinese goods from 10% to 25%.
Hopes of a deal pushed Asian stock markets to their highest levels in three weeks today. China’s Shanghai Composite index is up 1%, as is Japan’s Topix, while Hong Kong’s Hang Seng has jumped by 2%.
Investors are also cheered by reports that Beijing plans new policies to boost domestic demand.
Elsa Lignos of Royal Bank of Canada explains:
Markets have more sugar hits to cheer overnight, helping equities claw back more of their December losses.
Reports that China is planning fresh measures to boost domestic consumption have sent shares in large Chinese carmakers and appliance manufacturers higher, though details are scarce.
The UK’s FTSE 100 is expected to open 60 points higher, up 0.8%, having gained 50 points yesterday.
Also coming up today
There’s a flurry of Christmas trading updates from UK retailers, including supermarket chain Sainsbury’s, bakers Greggs and Majestic Wine.
Sainsbury’s seem to have missed expectations, with like-for-like sales down over 1%.
Economists will also be digesting new trade data from Germany, following a worrying drop in industrial output yesterday.
- 7am GMT: German trade figures for November
- 3.30pm GMT: Bank of England governor Mark Carney holds an online Q&A