(Bloomberg) -- U.S. stock-index futures rose after U.S. President Donald Trump reiterated that progress was being made in talks with Mexico even though more effort is needed from the southern neighbour. Further discussions are planned Thursday after officials failed to negotiate a deal to avert tariffs.
Speaking with reporters in Ireland, Trump added that China “wants to make a deal badly,” while the U.S. is prepared to place tariffs on another $300 billion of imports from the Asian giant, if necessary. Separately, the prospect of easier monetary policy continued to support the equity market.
S&P 500 Index futures contracts expiring in June rose 0.3% as of 10:30 a.m. in London. Dow Jones Industrial Average and Nasdaq 100 contracts gained 0.3% and 0.5% respectively. Treasuries rose and the dollar fell.
In Europe, the Stoxx Europe 600 Index rose as much as 0.6%, spurred by utilities and chemical stocks. Healthcare and personal goods equities were also on the rise, while oil company shares gained as crude contracts bounced from a near six-month low. Within this broad rally, telecoms and real estate were the only sectors in the red, while French carmaker Renault SA was among the biggest losers, sliding 7%, after Fiat Chrysler Automobiles NV abruptly withdrew its offer to merge.
U.S. shares closed higher on Wednesday in New York after Trump said he thought Mexico wants to make a deal. After reports that the talks broke down, Trump tweeted that progress is being made with Mexico, but “not nearly enough.” Tariffs are set to begin Monday if Mexico doesn't take unspecified actions to stem the flow of migrants and illegal drugs to the U.S.
“Alongside the stalling in the U.S.-China talks, the latest tariffs represent a ratcheting up of trade tensions and would hit growth, not just in Mexico but also in the U.S.,” Keith Wade, chief economist & strategist at Schroder Investment Management Ltd., wrote in a research note.
The Mexican peso plunged on news of the level of progress in the talks and after Fitch Ratings downgraded Mexico's credit rating to BBB, while Moody's revised the country's outlook to negative.
To contact the reporters on this story: Jackie Edwards in Sydney at jedwards160@bloomberg.net;Michael Msika in London at mmsika4@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Naoto Hosoda, Kurt Schussler
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