? Dollar cools further as U.S-China trade talks resume.
? European stocks gain, pound slips as Brexit talks enter "final phase."
? Brent crude oil prices climb on supply concerns.
? Fed meeting minutes in focus.
The dollar weakened against major currencies and European stock markets were broadly up ahead of the resumption of trade talks between the U.S. and China and the release of minutes of the latest Federal Open Market Committee meeting.
The dollar spot index inched down 0.14% as of 6:36 a.m. ET as a Beijing delegation led by China's Vice Commerce Minister Wang Shouwen embarks on a visit to Washington, D.C., to restart trade discussions, which stalled in May. The meeting comes a day before the U.S. is set to impose tariffs on $16 billion of Chinese goods and amid ongoing hearings on proposed 25% tariffs on a further $200 billion of Chinese imports.
While U.S. President Donald Trump has reportedly said he was not expecting much from the renewed talks, "[t]he increased scrutiny on President Trump's behavior could well prompt him to up the ante on trade in the days ahead in order to shift the terms of the debate away from events in New York, and the discussions on Michael Cohen and Paul Manafort," said Michael Hewson, chief market analyst at CMC Markets UK.
Cohen, Trump's former personal attorney, has pleaded guilty to tax evasion and campaign finance charges, while a federal jury convicted Manafort, Trump's former campaign manager, on bank and tax fraud charges.
Ten-year U.S. Treasury yields stood at 2.832% and gold ticked up 0.03% to $1,196.37 per ounce.
The S&P 500 is set to open lower after hitting a record of 2,872.87 in yesterday's trading and closing 0.21% higher at 2,862.96. The index has so far shrugged off concerns about the U.S.-China trade war, but if proposed tariffs on a further $200 billion of Chinese goods are implemented, Oliver Jones, an analyst at Capital Economics, believes China will not be able to retaliate in kind and will likely resort to targeting U.S. multinationals operating in China, potentially hitting U.S. equities harder.
Major European stock markets mostly advanced in early morning trading, with the Euro Stoxx 50 adding 0.32% and the FTSE 100 rising 0.29%. Earlier in Asia, the Nikkei 225 index and Hong Kong's Hang Seng Index closed up 0.64% and 0.63%, respectively, while the Shanghai Composite index finished 0.70% lower.
Investors are awaiting minutes from the FOMC's latest meeting against the backdrop of Trump criticizing the Federal Reserve for undertaking rate hikes under new Chairman Jerome Powell.
"Unfortunately for President Trump, there are unlikely to be any hints over looser monetary policy, despite his complaints, but they may shed some light on the committee's debate around where the neutral rate lies" and whether to move above neutral next year, said Guy Stear, an analyst at Société Générale.
The euro gained 0.15% against the dollar while the pound shed 0.10% after the EU's chief Brexit negotiator, Michel Barnier, said negotiations with Britain over Brexit plans were entering the final stage and will accelerate so that a deal can be reached before the end of 2018. The Australian dollar fell 0.22% against its U.S. counterpart as Prime Minister Malcolm Turnbull potentially faces another party leadership challenge after surviving a first one earlier this week.
Various emerging market currencies were buoyed by the "Trump-inflicted U.S. dollar pain," said TD Securities analysts. The Mexican peso was up 0.51% on reports that a "handshake" deal between the U.S. and Mexico regarding the North American Free Trade Agreement would be announced as early as tomorrow, although both Mexico and Canada denied any knowledge of the deal.
Brent crude oil rose 1.40% to $73.65 per barrel on the ICE Futures Exchange amid a report on lower U.S. crude inventories and U.S. sanctions on Iran.
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The day ahead:
8:30 a.m. ET — Canada retail sales June (Econoday consensus: -0.4% MOM)
10 a.m. ET — U.S. existing home sales (Econoday consensus: 5.420 million)
10:30 a.m. ET — U.S. EIA petroleum status report
2:00 p.m. ET — U.S. Federal Open Market Committee minutes