US-China Trade Talks Progress, But Deal Remains Distant
A look at the day ahead in European and global markets from Tom Westbrook
After a few weeks buying the rumour of U.S.-China de-escalation, markets gave a lukewarm welcome to news that the countries' top trade officials will meet in Geneva at the weekend.
It all sounds very preliminary. U.S. Treasury Secretary Scott Bessent told Fox News that Saturday's meeting would be about working out what to talk about.
"My sense is this will be about de-escalation," he said. But the Chinese side was guarded, citing a proverb in its statement.
"There is an old Chinese saying: Listen to what is said, and watch what is done...if (the U.S.) says one thing but then does another, or attempts to use talks as a cover to continue coercion and blackmail, China will never agree."
Still, it lifted U.S. futures and they held most of their gains through the Asia day, while Hong Kong stocks jumped. [MKTS/GLOB]
China also flagged interest rate cuts and expanded a channel for directing insurers' money into the stock market - cheered by investors, although a bit half-heartedly, because the fiscal spending they so desire is still absent.
The action filled in the waiting hours before the Federal Reserve meeting, where no policy change is expected but markets will be trying to gauge policymakers' sensitivity to jobs and inflation.
Markets pared back expectations of future cuts as data on Friday showed the labor market, for now, is holding up.
India's rupee weakened slightly on the dollar as the worst fighting in more than two decades erupted between India and Pakistan.
Asian currencies eased after a few sessions of surging against the U.S. dollar.
Mostly second-tier data is due in Europe through the day, though there are earnings out at healthcare multinational Fresenius and drugmaker Novo Nordisk.
Key developments that could influence markets on Wednesday:
-US Federal Reserve meeting
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(Editing by Muralikumar Anantharaman)
