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The U.S. and China are back talking on trade, Trump renews national emergency threat over border wall and markets look set to gain after Powell comments and China’s move to boost liquidity. Here are some of the things people in markets are talking about today. 

Back at the Table

U.S. and Chinese officials are set to begin trade negotiations on Monday in the hope of reaching a deal during a 90-day truce between President Donald Trump and his counterpart Xi Jinping. While the mid-level talks probably won’t produce a major breakthrough, the stakes are high as both sides face a resumption of tariffs in March if they don’t strike a deal. More senior-level discussions are expected later this month, with the South China Morning Post reporting that Trump may hold talks with Chinese Vice President Wang Qishan at the World Economic Forum in Davos, Switzerland. Here are seven issues that will be key to making headway: intellectual property; Huawei Technologies and 5G; Beijing’s “Made in China 2025” plan; energy; agricultural imports; auto tariffs and market access for banks. 

Trump’s Threats Over Wall

U.S. President Donald Trump edged closer toward a radical move to fund his border wall after the prospect of a deal with the Democrats to re-open government dimmed and the president’s political leverage appeared to dissipate. Trump on Sunday renewed his threat to bypass negotiations with Democratic lawmakers and instead declare a national emergency on the southern border with Mexico. While the possible move was revealed just days ago, White House lawyers and key budget staff have been looking into it for weeks, a person familiar with the matter said on condition of anonymity. Some advisers close to Trump are recommending that he declare a national emergency, despite wide recognition that it would be immediately challenged in court -- Democratic lawmakers said so last week after Trump floated the idea publicly.

Market Open 

Asian stocks are poised to gain after U.S. equities surged Friday on good news from the jobs market and Jerome Powell. Treasuries and gold tumbled as non-farm payrolls spiked, wage growth accelerated, and the Federal Reserve chairman said policy is flexible and officials are "listening carefully" to financial markets. The dollar fell against every G-10 peer but the yen, and oil rose.

China’s Liquidity Boost  

The People’s Bank of China trimmed banks’ required reserves, seeking to boost liquidity as China's economy slows . The amount of cash lenders must hold as reserves will be cut by 1 percentage point, dropping by 0.5 percentage point on January 15 and a further 0.5 percentage point on January 25, the central bank said on its website. The cut will release a net 800 billion yuan ($117 billion) of liquidity and will offset a funding squeeze ahead of the Chinese New Year, it said in a separate statement. Data last week showed a worsening picture for the world’s second-largest economy, with a manufacturing gauge falling into contraction, further depressing investor sentiment after a rough 2018.

Ghosn’s Vigorous Defence

Nissan Motor Co.’s former chairman Carlos Ghosn, indicted on suspicion of violating Japan’s financial reporting laws, will mount a “vigorous defense” at his first hearing this week, his son, Anthony, told France’s Journal Du Dimanche in an interview. Ghosn will attend a hearing of the Tokyo district court Tuesday after his legal team requested an explanation of why his detention has been repeatedly extended since he was taken into custody Nov. 19.

What we've been reading

This is what's caught our eye over the last 24 hours.

• Malaysia’s king abdicates in unprecedented move. 
• Japan’s $191 billion M&A spree just taking off. 
• Goldman sees a weaker greenback. 
• The world’s largest hedge fund returned 14.6 percent last year.
• Apple and Samsung's new deal would have been unthinkable only recently.
• May’s fight for Brexit deal amid second referendum threat.
• Race for next-generation battery supremacy. 

To contact the editor responsible for this story: Adam Haigh at ahaigh1@bloomberg.net

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