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Markets Subdued as Traders Await Outcome of US-China Meeting
In the absence of incremental news, global investors were cautious, and markets remained mostly quiet amid a second round of talks in London between Chinese and US authorities. Reports indicate positive signals from US officials, with suggestions that there may be a compromise involving US easing of tech export controls in return for Chinese lifting of rare earth restrictions. However, details on progress so far have been limited. As traders hope for a positive outcome, global bourses were mostly flat, with US equity futures slightly higher and European bourses trading sideways. Onshore and offshore Chinese equities gave up earlier gains, though Japanese and Korean stocks ended their sessions higher. Sovereign bond yields were modestly lower across jurisdictions, except for notably UK gilts, which fell by as much as 9 bps on softer-than-expected data, including cooler jobs and wage growth. US Treasuries, meanwhile, continued to trade in a tight range seen yesterday. Elsewhere in the US, the New York Fed’s Survey of Consumer Expectations, which showed a decline in 1ry and 5yr inflation expectations, was seen by contacts as a positive indicator ahead of tomorrow’s closely watched CPI report, which may give the markets direction.
