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European stocks recover on ‘limited’ US-China trade deal reports
LONDON, Oct 10, 2019 (BSS/AFP) – European and US stock markets rebounded
Wednesday, helped by reports that China would accept a partial trade deal
with the US in key talks this week.
The dollar was mixed while the pound steadied after yet more Brexit-
fuelled volatility.
Crude oil prices, which had rallied over one percent as Turkey launched an
offensive against Kurdish militants in northern Syria, trimmed gains after
data showed US oil output at record levels and stocks rising.
China remains open to a limited trade deal as long as US President Donald
Trump imposes no more tariffs, Bloomberg News and the Financial Times
reported, citing people close to the upcoming talks.
In return, Beijing would offer non-core concessions such as purchases of
US agricultural products, the reports added.
“This is likely contributing to the gains we’re seeing in Europe… but
unless the US is also willing to accept a limited deal — and nothing
currently suggests they are — it may not lead to anything,” noted Craig
Erlam, senior market analyst at Oanda trading group.
“Traders are jumping at the prospect of good news at the moment but
there’s been so many false dawns in these negotiations, this may just be the
latest,” he told AFP.
With less than a week to go before the next round of punitive tariffs is
due to hit, Beijing’s top trade envoy Liu He will Thursday meet US Trade
Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
“Liu He is coming with real offers, it’s not an empty visit,” the FT
quoted a source as saying.
“The Chinese are ready to de-escalate,” the source, briefed on the talks,
added.
Asian stock markets had mostly closed lower on Wednesday ahead of the
reports of possible progress in the talks, which could extend into Friday and
with Trump present.
Asia tracked losses in Wall Street and across Europe from Tuesday as
investors fretted over signs the global economy is slowing.
The International Monetary Fund has forecast the weakest growth in a
decade owing to the long-running tariff disputes.
With economic data increasingly weak, the fresh hopes sparked by the
reports for Thursday’s talks provided some much-needed support.
“But overall stock markets are still stuck in a violent see-saw… as
investors try to position themselves ahead of the (talks),” IG chief market
analyst Chris Beauchamp said.
Meanwhile oil prices shot 1.6 percent higher in European afternoon trading
as Turkey began an offensive against Kurdish militants in northern Syria.
They later fell back on data from the Energy Information Administration
showed production hitting a new record high while stocks rose more than
expected.
“It is a little worrying that inventories are rising despite lower prices,
as it suggests that demand is weak,” said market analyst David Madden at CMC
Markets UK.
Crude prices then later pushed higher once again.
BSS/AFP/HR/1045