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Trade deal optimism rises; HSBC drags FTSE 100 down – business live – The Guardian, Theguardian.com

Trade deal optimism rises; HSBC drags FTSE 100 down – business live – The Guardian, Theguardian.com


China’s Vice Premier Liu He (centre), U.S. Trade Representative Robert Lighthizer (left) and Treasury Secretary Steve Mnuchin (right) held constructive talks on trade last Friday
China’s Vice Premier Liu He (center), US Trade Representative Robert Lighthizer (left) and Treasury Secretary Steve Mnuchin (right) held constructive talks on trade last Friday Photograph: Yuri Gripas / Reuters

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Global stock markets are starting the week in good heart, as Washington and Beijing inch towards a ‘phase one’ trade deal.

U.S. and Chinese officials have both said they are “close to finalizing” some parts of a preliminary trade agreement, following a high-level phone call on Friday.

China’s commerce ministry says that technical talks about the phase 1 trade deal text with the US is “basically completed”.

Both sides have agreed to properly address core issues, it says.

And there’s also a mini-breakthough: The US has agreed to import cooked poultry from China, while Beijing will lift a ban on US

This has driven Asia-Pacific stocks to a three- month high this morning, with gains in China ( 0.7%), Japan ( 0.3%) and South Korea ( 0.2%).

The US trade representative has also said that the two sides are “close to finalizing some sections” of an interim agreement to ease trade tensions between the two countries, following that call between Robert Lighthizer, Treasury secretary Steven Mnuchin, and China’s vice-president Liu He.

Lighthizer’s office added that the negotiators “made headway on specific issues ”.

But investors shouldn’t, ahem, count their chickens

A ‘Phase One’ trade deal could mean that planned US tariffs on Chinese goods aren’t imposed in December, which could boost trade and economic growth.

Donald Trump is very keen to sign such a deal when he meets China’s Xi Jinping next month, at the Apec meeting in Chile in November.

However, this would only be a stepping stone towards a comprehensive deal, which could take much longer ….

Also coming up today

The pound is hovering around $ 1. 282 this morning, as EU leaders prepare to agree to a Brexit extension – probably to (January.

In Westminster, prime minister Boris Johnson will make another push for a general election in December, but Labor are expected to block him again.

Ipek Ozkardeskaya of London Capital Group says the pound would weaken if EU leaders only granted a short delay.

As it stands today, the probability of a no- deal Brexit is very slim. From the market perspective, a no-deal scenario is almost fully reflected in sterling prices near the 1. 30 mark against the US dollar.

Pound traders have further trimmed their net short positions during the week that ended on October 22 nd and have already moved on to pricing Britain’s next political challenges.

The agenda

  • 11 am GMT: CBI survey of UK retail sales in September
  • 12. 30 pm GMT: US trade date for September
  • 3pm GMT: ECB president Mario Draghi speaks at a ‘farewell event’ before his term ends this week

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