European markets and US Futures both edged higher this morning, in contrast to Asian shares where a disappointing Japanese PMI release brought a mixed tone overnight. This bullish start on European stocks is built on grounds of renewed hope for the next round of US-China trade talks. Optimism grew after China granted new waivers to many private companies for a tariff-free purchase of US soybeans. This adds to the de-escalating tone of the conflict, with the good news welcomed by traders around the world ahead of Chinese Vice Premier Liu He’s visit to Washington next week.
While investors bet on significant progress to be made during these high-level trade talks, very few people expect a deal to be reached between both sides. Having said that, any sort of potential US-China trade agreement (interim deal or not) would have a significant impact on stock prices and markets in general.
In the meantime, investors will be paying attention to data such as today’s US Consumer Confidence Index, especially after James Bullard, president of the Federal Reserve Bank of St Louis, said further stimulus was needed in order to fight against the downside risks to the US economy.
Photo by Joel Mott.
For now, the Stoxx-50 index trades slightly higher but remains in the middle of its 180-points wide trading range with the 3,535-pts level as immediate resistance and the 3,500/3,510 pts zone as support for the market.
