A fresh round of Sino-US talks is boosting Asian and European markets this morning, raising hopes that a resolution to the ongoing dispute and the removal of tariffs that are in place will go some way to slow down the gradual weakening of the two countries’ economies.
US negotiators underlined their departure from Beijing with optimistic comments saying the talks were constructive but there is still some way before the two sides finalise an agreement, not least the next round of negotiations that is due to take place in Washington next week.
Miners rally despite force majeure
Miners were among the main beneficiaries of the trade talks as they depend on the reestablishment of tariff-free trade flows in and out of China.
Glencore (LON:GLEN), Rio Tinto (LON:RIO) and other miners have gained close to 2% this morning, leading the FTSE risers’ table and Rio Tinto managed to avoid being knocked down for declaring force majeure on some of its iron ore contracts. Though bad news for the company, the decision will fuel fears of an imminent iron ore shortage in the market and push raw materials and steel prices higher.
Pound slides on faux Brexit date
On the day that Britain was meant to be leaving the EU, UK lawmakers are due to vote on the withdrawal agreement that will set out the terms of Brexit. The contentious agreement has drawn criticism for being a 'blindfold Brexit'.
The pound is mostly keeping calm and carrying on, only marginally weaker against the dollar and the euro as traders mostly try and just get through the next few days that will eventually have to lead to a Brexit resolution of some kind.
Lower US GDP keeps dollar mixed
With the US GDP slowing down to just below the 3% annual target the dollar is faring better against the yen but is losing ground to the euro, the Aussie dollar and the Canadian dollar.
The Federal Reserve’s more accommodative stance is helping US 10-Year treasury yields, which have firmed from their 15-month lows but both bond and currency investors remain cautious.
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