Markets

US markets hit record high as Trump ‘signs off’ China deal

Donald Trump

US President Donald Trump is believed to have signed off on a trade deal with China that would delay a new round of tariffs due to come into effect on Sunday.

The report from Bloomberg News follows the President’s tweet indicating that a “big” trade agreement with China was close, sending Wall Street to record highs.

With new sanctions due to be imposed this weekend, investors were buoyed by a tweet from the president that sent equities higher across Wall Street.

“Getting VERY close to a BIG DEAL with China. They want it, and so do we!” said Mr Trump.

Later the Wall Street Journal reported that US trade negotiators have offered to cancel the new round of tariffs on imported Chinese goods set to take effect on Sunday.

The move is part of an effort to cement a phase-one deal to de-escalate the trade relationship between the two powers, the paper said.

It also said Trump administration negotiators have offered to cut existing tariffs by as much as half on roughly $360bn of Chinese-made goods.

Investors and analysts will remain cautious given the number of false hopes that have been raised. Last week Mr4 Trump said any trade deal with China might best be delayed until after next year’s US presidential election.

However, there was enough confidence in today’s tweet to push the Dow Jones almost 1% higher to 28,175. The S&P 500 also climbed almost 1% to 3,171. The tech-focused Nasdaq was up almost 1% at 8,734.

In Europe, Christine Lagarde, who took over as head of the European Central Bank last month, has promised a rigorous assessment of how the Bank does business, looking at fundamental issues such as changing the inflation target and how to fight climate change.

The latest growth projections for the eurozone are for GDP to rise by 1.2% in 2019, 1.1% in 2020 and 1.4% in both 2021 and 2022.

Compared with the previous forecasts in September, the outlook for growth in 2020 has been revised down slightly.

After London closed the pound was down against both the dollar and euro. It fell 0.34% against the euro at €1.1817. Against the dollar it was down 0.52% at $1.3127.

The FTSE 100 climbed 57.22, or 0.79%, to close at 7,273.47 with miners and financials on the up. Leading the FTSE 100 risers was mines and steel group Evraz which climbed 5.46%, followed by Anglo American, +4.21% and Glencore +3.61%.

Among financials, Standard Chartered was up 4.02%, Hargreaves Lansdown +3.99% and Prudential +3.87%.

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