US-China agree temporary trade truce

There’s a positive tone to equity markets at the start of this week’s trading on news that the US and China reached a temporary truce on trade over the weekend. Asian stocks have gained ground overnight and Europe has opened firmly in positive territory this morning , while US indices look set to do likewise later. The dollar is a bit weaker though, trading not too shy of $1.14 against the euro, having closed out last week at around $1.13,  and falling to over $1.28 against sterling from Friday’s close of around $1.2750. The pound is trading at just under 89p against the single currency

The terms of the US-China trade truce will, among other things, see the Trump administration delay – for 90 days starting from January 1 – increasing the tariff rate on $200bn worth of imports from China to 25% from the current 10%, with  the latter agreeing to increase purchases of agricultural and industrial goods from the US, while discussions on the broad trade relationship between the two countries continue

Ahead of next week’s vote on the Brexit deal a five-day debate is due to get underway in the UK parliament this week, though proceedings may get delayed as opposition parties demand the government publishes in full the Attorney General’s legal advice on the deal

The annual rate of headline inflation in the Euro area dipped to 2% in November (from 2.2% in October) according to the flash reading. This partly reflected the impact of the recent decline in oil prices, though the core rate also nudged down last month to stand at 1%

It is quite a busy week on the data front with manufacturing and services PMIs in the main economies due today and Wednesday respectively, while the latest (November) employment report in the US is published on Friday