European markets set for higher open as Trump says U.S.-China trade talks underway

European markets are set to continue their rally on Tuesday after U.S. President Donald Trump said that trade talks with China, which had stalled in May, have “already begun” following his meeting with Chinese President Xi Jinping at the weekend.

The FTSE 100 was seen gaining a further 16 points to 7,513, the DAX is expected to open around 12 points higher at 12,534, and the CAC is set to edge 7 points higher at 5,575.

President Trump said on Monday that trade talks were back underway between the world’s two largest economies after the leaders met on the sidelines of last week’s Group of Twenty (G-20) summit in Osaka, but added that any deal would need to be somewhat tilted in Washington’s favor.

Stocks in Asia mostly edged up in Tuesday afternoon trade, Hong Kong’s Hang Seng index leading gains with a 1.35% jump on its return to trade after a holiday on Monday. Meanwhile, the Reserve Bank of Australia (RBA) slashed its cash rate to an all-time low.

Just days after reaching a truce in the U.S.-China trade war, the White House went on to ratchet up pressure on Europe, proposing $4 billion in potential additional tariffs on European Union goods amid a long-running dispute over aircraft subsidies. The U.S. Trade Representative’s office listed olives, Italian cheese and Scotch whisky among those which could be hit with tariffs.

Focus in Europe will also be on the EU’s third consecutive day of discussions over who should take the bloc’s top jobs until 2025. Leaders from the 28 member states were embroiled in exhaustive talks Monday which resulted in Italy and eastern European states blocking socialist Dutch former foreign minister Frans Timmermans from replacing Jean-Claude Juncker at the helm of the EU Commission.

In the U.K., Chancellor of the Exchequer Philip Hammond challenged the two hopefuls to replace Prime Minister Theresa May over their spending pledges, warning that leaving the EU without a deal would swallow the budget allocated to ease Britain’s post-Brexit transition.

In corporate news, British giant WPP announced Monday that it is in exclusive talks to sell a majority stake in data analytics unit Kantar to private equity firm Bain Capital. The $4 billion deal is intended to steer the world’s biggest advertising company back to growth.

Source: CNBC