Investors will be welcoming the easing of geopolitical tensions at the start of the week, with US Treasury secretary Scott Bessent and Trade Representative Jamieson Greer saying they’ve reached a deal with China to cut America’s trade deficit with the world’s second-biggest economy.
Meanwhile, Ukraine President Volodymyr Zelenskyy will meet his Russian counterpart Vladimir Putin in Turkey on Thursday to hold peace talks, while India and Pakistan have agreed to an immediate ceasefire after days of hostilities between the two nuclear-powered nations.
Meanwhile, Hong Kong’s stock exchange is eyeing up a new listing by Chinese battery maker CATL.
And OpenAI has reportedly been in discussions with Microsoft that could pave the way for a future initial public offering.
Calm descends
Stocks on Wall Street were generally weaker on Friday ahead of the US-China talks, with the S&P 500 index down 0.1%, although the Chicago Board Options Exchange’s volatility index – known as Wall Street’s fear gauge – slipped 2.9% as investor nerves settled down.
Bessent and Greer said on Sunday they made substantial progress to reduce the US trade deficit in their talks with Chinese officials, with full details to be announced on Monday.
Meanwhile, peace talks are on the cards between Ukraine and Russia with their leaders to meet on Thursday, after US President Donald Trump urged Ukraine’s Zelenskyy to accept the Russian offer of direct leader-to-leader talks.
And the US also helped broker an immediate ceasefire between India and Pakistan after days of attacks killed 66 civilians.
Geopolitical tensions have loomed over investor sentiment this year, as ongoing conflicts were amplified by the US embarking on a reordering of global trade with its widespread tariff regime.
Underwhelming?
“Tariffs remain the focus following US President Trump's suggestion on Friday that an 80% tariff on China ‘seems right’, but that is still very high, and we wonder if markets may end up being underwhelmed by the outcome of negotiations, despite the positive tone of Trump and Bessent about progress made over the weekend,” ANZ New Zealand economists said in a note.
The kiwi dollar traded at 59.22 US cents at 7.30am in Auckland from 58.97 cents last week, and Australian futures are pointing to a 0.2% increase for the S&P/ASX 200 index.
Meanwhile, the Financial Times reported OpenAI and Microsoft are revisiting their partnership in negotiations designed to let the ChatGPT maker to embark on an IPO at some point while preserving the software giant’s access to the tools.
And Chinese battery maker CATL is set to list in Hong Kong, raising at least US$4 billion, according to a Reuters report.
No local data is scheduled for today.
Reporting by Paul McBeth. Image from OC Gonzalez on Unsplash.
