Skip to main content

Global equity markets gained and the dollar held steady on Thursday ahead of the G20 summit where a much-anticipated meeting of U.S. President Donald Trump and Chinese President Xi Jinping may lead to a truce in the U.S.-China trade war.

The world’s two largest economies have agreed to a tentative truce in their trade dispute before the planned meeting on Saturday, Hong Kong’s South China Morning Post reported, citing sources.

The report rekindled investor interest in riskier assets and weighed on safe-havens as it dialed down fears that Trump would impose new tariffs on $300 billion in Chinese goods.

A Wall Street Journal report that Xi planned to present Trump with a set of terms Washington should meet before Beijing is ready to settle their dispute tempered optimism.

“I continue to be very skeptical that the U.S., at least this current administration, will reach a deal with China,” said Kristina Hooper, chief global market strategist at Invesco in New York.

“I can’t find any compelling reasons why China would make real concessions to the U.S.,” Hooper said.

The dollar index, which tracks the U.S. dollar against the euro, Japanese yen, sterling and three other currencies, traded slightly lower at 96.205. The dollar was little changed against the euro and the yen.

MSCI’s gauge of stocks across the globe gained 0.46 per cent, while both the pan-European STOXX 600 index and the FTSEurofirst 300 index of leading regional shares closed basically at break-even.

Canada’s main stock index finished flat lower on Thursday.

The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 4.49 points, or 0.03 per cent, at 16,307.73.

Only four of the index’s 11 major sectors were lower.

The energy sector dropped 2.7 per cent as U.S. and Brent crude prices edged higher.

The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.7 per cent after gold futures declined.

The heavyweight financials sector lost 0.3 per cent and the industrials sector rose 0.3 per cent.

Air Canada jumped 3.2 per cent after tour operator Transat AT Inc accepted the airline’s all-cash offer of $520-million over a higher rival bid. Transat slipped 5.4 per cent.

Stocks on Wall Street gained.

The Dow Jones Industrial Average fell 11.05 points, or 0.04 per cent, to 26,525.77, the S&P 500 gained 11.02 points, or 0.38 per cent, to 2,924.8 and the Nasdaq Composite added 57.79 points, or 0.73 per cent, to 7,967.76.

Healthcare rose 0.6 per cent and financials gained 0.9 per cent, with big lenders leading the charge ahead of results of the second part of the Federal Reserve’s annual stress test for banks.

Semiconductor companies, which have a sizable revenue exposure to China, traded higher, with the Philadelphia Semiconductor index rising 1.5 per cent.

U.S. Treasury debt yields fell on concerns that trade discussions between the United States and China on Saturday may be more complicated than previously expected.

News headlines suggest that “the meeting in Osaka is going to be a lot more tense than some of the initial optimism suggested,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

The benchmark 10-year U.S. Treasury note rose 12/32 in price to push its yield lower to 2.0054 per cent.

German government bond yields fell back toward record lows after data showed annual inflation in the euro zone’s biggest economy remained well below the European Central Bank’s target.

Germany’s 10-year bond yield was down 1.2 basis points at minus 0.32 per cent, nearing Tuesday’s record low of minus 0.336 per cent.

U.S. gold futures settled 0.2 per cent lower at $1,412 an ounce.

Oil prices edged higher on Thursday on expectations that OPEC will extend an output cut agreement, while investors awaited a meeting between the United States and China that could produce a breakthrough on trade talks.

Brent crude futures rose 6 cents to settle at $66.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 5 cents to settle at $59.43 a barrel.

The Organization of the Petroleum Exporting Countries is expected to roll over a deal on cutting supplies at a meeting next week and discuss deepening the curbs, Iraq’s oil minister said.

Sources told Reuters this month that Algeria had floated an idea of deepening the cut by some 600,000 barrels per day.

A deal between OPEC and its allies, including Russia to curb output by 1.2 million bpd, runs out at the end of June. Meetings on July 1-2 in Vienna will discuss the next steps.

The OPEC meeting will follow the G20 summit this weekend.

Reuters

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe