European markets close higher on U.S.-China trade hope

European markets closed higher on Monday after U.S. President Donald Trump said he expects to sign a portion of a trade deal with China ahead of schedule.

Closer to home, the EU granted the U.K. a three-month Brexit extension, and corporate earnings remained on traders’ radars.

The pan-European Stoxx 600 ended the session 0.3 percent higher, with trade-sensitive automotive stocks rising 1.9 percent to lead gains, while banks slipped 0.4 percent following disappointing earnings from HSBC.

Trump told reporters at Joint Base Andrews on Monday that the “phase one” trade agreement between the world’s two largest economies should be signed ahead of schedule, according to Reuters. His comments raised hopes that an initial deal will be finalized at a summit in Chile next month and buoying global stocks.

European Council President Donald Tusk announced the bloc’s decision Monday morning on Twitter. The U.K. will now be able to leave the EU at any point before January 31 providing British Prime Minister Boris Johnson can secure approval from Parliament on his exit deal.

Johnson’s government on Sunday increased pressure on opposition leaders to hold an early general election in December in order to break the long-standing impasse in the U.K.’s Parliament over Brexit.

Global markets received a boost on Friday after the Office of the U.S. Trade Representative said the U.S. and China were close to finalizing parts of phase one of a trade deal.

Traders will also be anticipating Wednesday’s meeting of the Federal Open Market Committee (FOMC), with an interest rate decision expected on Thursday following two successive rate cuts from the U.S. central bank.

Across the Atlantic, stocks on Wall Street traded higher, with the S&P 500 touching a record high on the back of corporate earnings and optimism around Sino-U.S. relations.

Earnings in focus