SYDNEY – Share markets and the dollar on Wednesday offered a guarded welcome to the latest signs of progress in US-China trade talks, while awaiting more detail of what was decided and whether it would stick for long.
Bond investors were also hunkered down for a reading in US inflation that could show the early impact of tariffs on prices, and a Treasury auction that will test demand for the debt.
Over in London, negotiators from Washington and Beijing said they had “agreed a framework on trade” that would be taken back to their leaders.
US Commerce Secretary Howard Lutnick added the implementation plan should result in restrictions on rare earths and magnets being resolved, but again offered no specifics.
“Even though details are scant, as long as the two sides are talking, I think markets will be happy,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
“It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement,” she added. “That sort of comprehensive deal usually takes years to be reached, so I’m sceptical that a framework reached at the meeting in London will be comprehensive.”
The law was another hurdle as a federal appeals court allowed President Donald Trump’s most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them.
Investors, who have been badly burned by trade turmoil before, offered a cautious response and MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Japan’s Nikkei added 0.4 percent and Australian stocks firmed 0.4 percent.
EUROSTOXX 50 futures, FTSE futures and DAX futures were all down 0.2 percent, while S&P 500 futures and Nasdaq futures both lost 0.1 percent.
