China has cut interest rates, and news of trade talks between Beijing and Washington lifted Asian stocks.
The People’s Bank of China is making a half-point cut to the banks' reserve requirement ratio, its benchmark interest rate, and trimming other interest rates, releasing 1tn yuan into the banking system.
Pan Gongsheng, the governor of the People’s Bank of China, said the move was because of the “uncertainties of global economy, economic fragmentation and trade tensions, which disrupted global industrial supply chains”.
Beijing announced the measures amid a damaging trade war with the US.
After weeks of rumours over de-escalation between the two countries, markets gave a lukewarm welcome to the news that top trade officials are due to meet in Geneva this weekend – the first meeting since Donald Trump launched punitive tariffs against China.
China’s vice-premier He Lifeng will meet the US Treasury secretary, Scott Bessent, on the sidelines of meetings in Switzerland between 9 and 12 May. The US trade representative, Jamieson Greer, will also attend.
Japan’s Nikkei edged 0.1% lower, while Hong Kong’s Hang Seng rose by almost 0.5% and markets in Taiwan, Australia and South Korea were up between 0.1% and 0.55%. In mainland China, the Shanghai Composite rose by almost 0.5%, while the Shenzhen Composite gained 0.16%.
Oil prices are rising again, after yesterday’s 4% jump, amid signs of higher demand in Europe and China, lower production in the US and tensions in the Middle East.
Brent crude is 1.1% ahead at $62.86 a barrel, while US crude has risen by 1.3% to $59.86 a barrel.
In Germany, factory orders jumped more than expected in March, in the run-up to Trump’s trade tariff announcements.
Orders rose by 3.6% between February and March, according to the federal statistics office, beating analysts’ expectations of a 1.3% increase. Without major orders, demand was up by 3.2%.
Orders rose across electrical and transport equipment, machinery, automotives and pharmaceuticals.
The agenda
• 8.30am BST: eurozone HCOB construction PMI for April
• 9.30am BST: UK S&P Global construction PMI for April
• 10am BST: eurozone retail sales for March
• 7pm BST: US Federal Reserve interest rate decision
We'll be tracking all the main events throughout the day …
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