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Good morning. The U.S. is working towards a final deal to end trade tensions with China, the European Central bank is seen taking its time assessing policy and attention to turns to when, or if, North Korea and the U.S. will meet again. Here’s what’s moving markets this morning.

Deal in the Works?

The U.S. is preparing a final trade deal with China that may come within the next couple of weeks, according to people familiar with the matter. There’s still a degree of caution in the air about how much work is still needed to get a deal done and it’s costing American exporters dearly, but sources are pointing to a possible summit as soon as mid-March, which is shaping up to be a busy time. The U.S. is also facing hurdles on the new NAFTA agreement and President Donald Trump may have to give up metals tariffs in order to get the deal sealed.

Take Your Time

The European Central Bank is likely to keep banks waiting for a decision on whether the slowdown in the euro area is sufficiently severe to justify reviving its policy of offering long-term loans. The bank is due to meet next week but economists don’t think an announcement on longer-term refinancing operations will come until the meeting in April, giving the bank more leeway to discuss how to respond to the softer European economy. Germany, meanwhile, appears to be finally warming to the notion of loosening the purse strings and pumping money into infrastructure.

Communication Breakdown

North Korean leader Kim Jong Un asked for more than Trump could give. The abrupt collapse of talks between the two sent ripples through Asian markets and raises concern about whether North Korea will follow through and disarm. North Korea even gave a very rare press conference and struck a cautious tone about further talks, even disputing the account that Kim had wanted all sanctions to be lifted. However, Kim has said he’s willing to meet Trump again in the future.


The end of Benjamin Netanyahu’s political career appears to be drawing closer. Israel’s attorney general informed the prime minister he’ll be put on trial for bribery, fraud and breach of trust only 40 days before new elections. Netanyahu has called it a “witch hunt” but no question it poses a serious challenge to his poll prospects. Eyes are also trained on India and Pakistan, particularly whether more conciliatory moves will prove successful in quelling the tensions between the neighbors.

Coming Up...

March begins with a sizable data dump. We’ll have manufacturing PMIs from Germany, France, Italy, the U.K. and then the U.S. later in the day, all very closely watched amid the ongoing trade negotiations between the U.S. and China. We’ll also have euro-area inflation, mortgage data from the U.K. and some GDP figures from Hungary and the Czech Republic. Two big U.K. earnings reports to watch too from London Stock Exchange Group Plc and advertising giant WPP Plc.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

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