Stocks rally ahead of US-China trade talks in London

Telegraph

3 hours ago

Stock markets jumped in Asia ahead of US-China trade talks due to get under way in Britain today.
Shares were up from Hong Kong to Tokyo following a call late last week between US president Donald Trump and Chinese leader Xi Jinping.
Representatives from the world's two largest economies are due to meet at a still undisclosed location in London in an attempt to revive a preliminary trade agreement reached in Geneva last month.
The US delegation will be led by treasury secretary Scott Bessent, commerce secretary Howard Lutnick and US trade representative Jamieson Greer. The Chinese contingent will be helmed by vice premier He Lifeng.
Relations soured earlier this month after President Trump accused China of violating the terms of the deal. Beijing accused Washington of doing the same.
Latest updates
09 June 2025 8:15am
8:15AM
Government borrowing costs fall amid trade hopes
The cost of government borrowing edged lower in Britain ahead of the talks between top US and Chinese trade officials in London.
The yield on 10-year UK gilts – a benchmark for the cost of servicing the national debt – declined two basis points to 4.62pc on bond markets.
Yields were also lower across the eurozone after the European Central Bank last week cut interest rates by a quarter of a percentage point to 2pc, as expected.
Germany's 10-year bund yield was down nearly three basis points to 2.54pc.
8:06AM
UK stocks muted ahead of trade talks
The FTSE 100 opened slightly higher as the US and China prepare to hold trade talks in London.
The UK's blue-chip stock index climbed 0.1pc to 8,845.73 while the mid-cap FTSE 250 was flat at 21,159.10.
8:03AM
Trump says China talks 'should go very well'
Donald Trump said the talks in London 'should go very well'.
The negotiations come just a few days after the US president and Xi Jinping finally held their first publicly announced telephone talks since the Republican returned to the White House.
Trump said the call, which took place on Thursday, had reached a 'very positive conclusion.'
Xi was quoted by state-run news agency Xinhua as saying that 'correcting the course of the big ship of Sino-US relations requires us to steer well and set the direction'.
The call came after tensions between the world's two biggest economies had soared, with Trump accusing Beijing of violating a tariff de-escalation deal reached in Geneva in mid-May.
Mr Trump's press secretary, Karoline Leavitt, told Fox News on Sunday: 'We want China and the United States to continue moving forward with the agreement that was struck in Geneva.'
7:46AM
China export growth plunges as Trump tariffs bite
China's export growth slowed to a three-month low in May as US tariffs hit shipments.
Total exports from the world's second largest economy expanded by 4.8pc year-on-year last month, down from 8.1pc in April and below analyst expectations of 5pc, according to customs data.
China's exports to the US plunged by 34.5pc in the sharpest drop since the outbreak of the Covid pandemic in February 2020.
Imports dropped 3.4pc, deepening sharply from the 0.2pc decline in April, despite the trade deal agreed between Beijing and Washington in Geneva at the start of last month.
Zichun Huang of Capital Economics said: 'The slowdown in export growth in May should partially reverse this month, as it reflects the drop in US orders before the trade truce, which took time to feed through to actual shipments.
'But with tariffs likely to remain elevated and Chinese manufacturers facing broader constraints on their ability to sustain rapid gains in global market share, we think export growth will slow further by year-end.'
Exports YoY in China decreased to 4.80 percent in May from 8.10 percent in April of 2025. https://t.co/BXyY3qDPuZ pic.twitter.com/Ce2QQa2ZFi
— TRADING ECONOMICS (@tEconomics) June 9, 2025
7:35AM
Trade war 'in nobody's interests' says UK Government
Top US and Chinese officials will sit down in London today for talks aimed at defusing the high-stakes trade dispute between the two superpowers.
Their trade war has deepened in recent weeks beyond tit-for-tat tariffs to export controls over goods and components critical to global supply chains.
At a still-undisclosed venue in London, the two sides will try to get back on track with a preliminary agreement struck last month in Geneva.
The US delegation will be led by treasury secretary Scott Bessent, commerce secretary Howard Lutnick and US trade representative Jamieson Greer. The Chinese contingent will be helmed by vice premier He Lifeng.
A UK Government spokesman said: 'The next round of trade talks between the US and China will be held in the UK on Monday.
'We are a nation that champions free trade and have always been clear that a trade war is in nobody's interests, so we welcome these talks.'
7:22AM
FTSE 100 on track to open flat
Investors in Europe appear more sceptical about the prospects of the US-China trade talks kicking off in London today.
The FTSE 100, France's Cac 40 and Germany's Dax are all on track to open flat when trading gets underway later.
Kathleen Brooks, research director at XTB, said: 'Asian stocks are rallying at the start of the week; however, European equity futures and US futures are taking a breather and are pointing to a slightly lower open later today.'
She added: 'Stocks may need a new driver to extend last week's rally after investors scaled back their expectations for Federal Reserve interest rates cuts for this year. There are less than two cuts priced in by the Fed Fund Futures market by the end of this year.
'The number of rate cuts from the Fed could be determined by the outlook for US inflation, which is released later this week. As the growth data remain unaffected by tariffs for now, inflation could hold the key for US monetary policy.'
7:15AM
Good morning
Thanks for joining me. Asian stock markets rallied overnight in the lead up to fresh trade talks between the US and China which will kick off in London later. Here is what you need to know.
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What happened overnight
Shares rose in Asia ahead of the second round of trade talks between Washington and Beijing, due later today in London.
In South Korea, the Kospi added 1.9pc to 2,865.52.
Chinese markets rose even though the government reported that exports slowed in May, growing 4.8pc from a year earlier after a jump of more than 8pc in April. Exports to the United States fell nearly 10pc compared with a year earlier.
China also reported that consumer prices fell 0.1pc in May from a year earlier, marking the fourth consecutive month of deflation.
Hong Kong's Hang Seng picked up 1.4pc to 24,119.64 while the Shanghai Composite Index climbed 0.4pc to 3,397.13.
Tokyo's Nikkei 225 gained 1.1pc to 38,137.09 as the government reported that the Japanese economy contracted by 0.2pc in the January-March quarter.
Australia's market was closed for a public holiday.
On Friday, stocks gained ground on Wall Street following a better-than-expected report on the US job market.
The gains were broad, with every sector in the S&P 500 rising. That solidified a second consecutive winning week for the benchmark index, which has rallied back from a slump two months ago to come within striking distance of its record high.
The S&P 500 rose 1pc to 6,000.36. The Dow Jones Industrial Average added 1pc to 42,762.87 while the Nasdaq gained 1.2pc, to 19,529.95.