FTSE 100 set for a positive start with trade hopes rising

The FTSE 100 looks set to make a positive start to the week amid hopes the frosty trade stand-off between America and China is finally thawing.

The catalyst for the sentiment change was strong suggestion by commerce secretary, Wilbur Ross, that Chinese telecoms giant Huawei will be licensed to trade with up to 260 US companies.

Mired in spying allegations, Huawei has been in trade cross-hairs since the start of on-off negotiations between the worlds two largest economies.

Speaking from the ASEAN economic summit in Bankok, Ross also told reporters that “long overdue” talks with China would recommence, adding the two sides are “very far along” with a preliminary trade accord under discussion.

“On the trade front, some progress was made at the back end of last week,” said David Madden, analyst at CMC Markets.

“The US have had concerns about the dip in the Chinese yuan, in addition to intellectual property rights, and positive steps were taken in relation to those issues.”

Asias main markets were generally in positive territory. This is likely to provide a bump to the UK blue-chip index, which is predicted by the spread betting firms to advance 34 points at the open to 7336.42.

The pound, meanwhile, held steady at US$1.2936 as weekend polls put Boris Johnson in a commanding lead in the race for 10 Downing Street.

On the corporate front, it is a big week for the retail sector with updates from Sainsbury (LON:SBRY), Ocado (LON:OCDO) and Primark owner Associated British Foods (LON:ABF).

Around the markets: Gold US$1,513.80 an ounce, up US$2.40; Brent crude US$61.31 a barrel, down 38 cents; bitcoin US$9,165.47, down US$117.54

Mondays Main Corporate News

Interims: Norcros PLC (LON:NXR), Ryanair Holdings PLC (LON:RYA)

Trading statements: Hiscox Ltd (LON:HSX)

Economic announcements: UK and EU construction PMI, US factory orders

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