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European stocks set to rally after US and China agree to temporary trade truce

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European stocks are set to open higher Monday morning, after President Donald Trump and President Xi Jinping negotiated a temporary truce to their trade conflict over the weekend.

The FTSE 100 is seen 107 points higher at 7,087, the CAC is expected to open up around 83 points at 5,086, while the DAX Is poised to start 208 points higher at 11,466, according to IG.

Market focus is largely attuned to global trade developments, after Washington and Beijing effectively agreed to pause their trade war and work toward a more comprehensive pact. Trump and Xi reached the cease-fire over a working dinner in Buenos Aires on Saturday evening.

The political deal, which appears to do little to resolve the stark differences between the world’s two largest economies, should see both sides hold off on slapping additional charges against each other’s goods in the short term.

Over the next 90 days, American and Chinese officials will continue to negotiate lingering disagreements on technology transfer, intellectual property and agriculture.

The progress on Sino-U.S. trade provided emerging markets and trade-exposed currencies with a much-needed boost Monday morning.

In Asia, MSCI’s broadest index of Asia-Pacific shares, excluding Japan, rose almost 2 percent on the news.

Back in Europe, investors are likely to watch out for a final reading of the euro area’s Markit manufacturing PMI data for November at around 9:00 a.m. London time.

Source: CNBC

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