European stocks look set to open sharply higher on Monday as a thaw in troubled trade relations between the United States and China tempered risks to the global economy.
Copper and other base metals rallied while gold retreated after U.S. President Donald Trump and Xi Jinping have agreed to resume trade negotiations at the G20 summit in Japan.
The U.S. agreed to put off additional tariffs on Chinese goods indefinitely while removing some curbs on Huawei Technologies Co. buying high-tech equipment from the U.S. In response, China said it would buy large amounts of American farm products.
Oil prices jumped more than 2 percent after Russia and OPEC cartel kingpin Saudi Arabia agreed to extend their output caps. OPEC’s two-day meeting is scheduled to be held today and tomorrow as the oil cartel and its allies try to extend the output cuts by another six to nine months.
Asian markets surged, with benchmark indexes in China and Japan rising over 2 percent, as Trump’s historic visit to North Korea helped sooth geopolitical concerns and added to the upbeat mood.
Investors shrugged off data showing that Chinese manufacturing activity contracted for the first time in four months in June on trade disputes.
The Caixin manufacturing PMI dropped to 49.4 from 50.2 in May as trade tensions caused renewed declines in total sales, export orders and production.
Elsewhere in Japan, a measure of large manufacturers’ confidence weakened to a three-year low in the second quarter, the latest quarterly Tankan survey from Bank of Japan revealed.
Closer home, unemployment and final manufacturing PMI results from euro area are due later in the day, headlining a busy day for the European economic news.
U.S. stocks rose on Friday as investors looked ahead to the Trump-Xi meeting and all 18 of the largest banks