BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are likely to open on a positive note Wednesday after reports suggested that U.S. and Chinese trade envoys will meet for talks next week.
According to Bloomberg News, U.S. officials including Trade Representative Robert Lighthizer will travel to China next Monday for the first face-to-face meeting since talks broke down in May.
It remains to be seen whether China agrees to make the deep structural changes to its economy that Trump is demanding for removing tariffs on Chinese goods and softening his hard line on Huawei.
Asian markets traded higher as optimism prevailed over possible new U.S.-China talks and disappointing U.S. housing data reinforced expectations of a near-term interest rate cut by the Federal Reserve.
Markets have already priced in a 25 bps rate cut by the Fed at its upcoming July 30-31 policy meeting.
The European Central Bank holds a policy meeting on Thursday amid expectations it will provide dovish guidance, paving the way for easing in September to stimulate Eurozone growth.
The International Monetary Fund (IMF) has cut its growth forecasts for the global economy for this year and next, citing trade and technology tensions.
Gold prices moved away from a one-week low touched in the previous session and the dollar extended gains to a five-week high, while oil prices moved higher after industry data showed a much bigger than expected drop in U.S. inventories.
The British pound drifted lower in the aftermath of Boris Johnson winning the Tory Party leadership race by a large margin.
Geopolitical tensions remain high with the head of U.S. Central Command saying the United States may have taken down a second Iranian drone over the Strait of Hormuz last week.
On the data front, flash Purchasing Managers' survey figures from euro area are due later in the session, headlining a light day for the European economic news.
Overnight, U.S. stocks closed higher after reports suggested that U.S. officials will soon travel to China for face-to-face trade talks.
A deal on the federal budget and debt ceiling as well as upbeat earnings news from the likes of Coca-Cola and United Technologies also boosted sentiment.
The Dow Jones Industrial Average and the S&P 500 climbed around 0.7 percent while the tech-heavy Nasdaq Composite gained 0.6 percent.
European markets gained ground on Tuesday, thanks to encouraging earnings results, monetary easing hopes and renewed optimism about U.S.-China trade negotiations.
The pan-European Stoxx 600 gained 1 percent. The German DAX rallied 1.6 percent, France's CAC 40 index rose 0.9 percent and the U.K.'s FTSE 100 advanced 0.6 percent.
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