Trump directs China to lift tariffs on U.S. farm products

US Trade Representative Robert Lighthizer

US Trade Representative Robert Lighthizer

"China and the United States reaching a mutually-beneficial, win-win agreement as soon as possible is not only good for the two countries, but is also good news for the world economy", said Guo Weimin, spokesman for the high profile but largely ceremonial advisory body to China's parliament.

"25 that he and Chinese President Xi Jinping would engage in a "'signing summit'" as the two nations approach a trade deal, CNN reported. Nominal goods exports to China tanked by 33% year-over-year in December, likely as a result of China's retaliatory tariffs on USA goods.

In addition, Washington has sought increased Chinese purchases of USA goods, including farm and energy commodities and manufactured products, to reduce a US trade deficit with China that it estimates at more than $417 billion for 2018. The pan-European STOXX 600 index was up 0.4 percent.

All of that proved positive for risk sentiment with E-mini futures for the S&P500 and the Dow gaining 0.4 percent each while Japan's Nikkei futures climbed 0.6 percent. Hong Kong's Hang Seng advanced 0.5 per cent to 28,959.59 and Seoul's Kospi lost 0.2 per cent to 2,190.66. It is uncertain if Trump will remove all tariffs or have some remain in effect, stated The New York Times.

POLICY EASING? March is expected to be a crucial month for global markets.

A bipartisan group of US lawmakers complained to the Trump administration on Monday that its response to rights abuses against China's Muslim minority was inadequate months after saying it was looking into imposing sanctions.

"This is a major reason why economists say, 'You really don't want this as your scorecard, "' said Phil Levy, a former senior economist for trade with president George W. Bush's council of economic advisers.

A slew of surveys has highlighted how much manufacturers are suffering worldwide, particularly those exposed to China's slowdown, and added to expectations that central bank policy tightening is as good as finished. "It is about demonstrating to strongmen globally that the world will hold them accountable for their actions", the lawmakers wrote in a letter to U.S. Secretary of State Mike Pompeo. Still, U.S. stocks have regained most of their losses from the autumn when investors were more pessimistic about trade prospects. Net exports had only been a small drag in last week's initial estimate for fourth-quarter GDP but today's report is pointing to a more significant one.

Moody's on Friday lifted Greece's issuer ratings to B1 from B3, citing the effectiveness of the country's reform programme.

In midday trading, London's FTSE 100 was up 0.6 per cent at 7,151 and Germany's DAX was 0.2 per cent higher at 11,621.

Speculators have ramped up long dollar bets, with the latest positioning data showing net positions rising to $27.24 billion for the week ending March 1.

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