European shares rose to fresh one-month highs and safe-haven assets such as gold and the yen fell after news of U.S.-China talks set for early October raised hopes of a de-escalation in their trade war before it further damages the world economy.
The pan-European STOXX 600 index rose 0.63% to touch its highest level since Aug. 1. France’s CAC 40 index jumped 0.79% to hit a more than one-month high, outperforming major European bourses, aided by a 8% rise in shares of engine maker Safran after the company upped its full-year profit forecasts.
The rally followed gains in Asia, with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining as much as 1.08% to reach its highest since Aug. 2.
U.S. stock futures reversed early losses and rose 0.5%.
The Chinese yuan jumped versus the dollar in offshore trade, while safe-haven assets such as gold, the Swiss franc, and the yen fell.
China’s Commerce Ministry said on Thursday its trade team would consult with their U.S. counterparts in mid-September in preparation for negotiations in early October, hinting at progress in reducing trade friction.
Both sides agreed to take actual actions to create favorable conditions, the ministry added, without giving more details.
“The general market tone is driven by the announcement of the meeting of high-ranking officials between China and the U.S,”
“But this is not a sustained move into risk-on mode as nothing concrete has come out of it yet and investors need to wait to see whether the meeting will happen and what the results from it will be,” said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.