Looming US-China trade talks lift Asian stock markets; China cuts interest rates – business live

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German factory orders jump 3.6%

In Germany, factory orders jumped more than expected in March, in the run-up to Donald 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. Stripping out major orders, demand was up by 3.2%.

Orders rose across electrical and transport equipment, machinery, automotives and pharmaceuticals.

Business surveys from S&P Global also suggest that Germany’s factories emerged from a downturn in April, helped by export orders.

However, Trump’s tariffs against the EU – announced on 2 April, but then paused – have clouded the outlook for Europe’s biggest economy. Economists are wondering whether the improvement in performance was due to companies trying to get ahead of the levies.

Goldman Sachs analysts said last week that such frontloading may have added 15% to eurozone exports to the US between January and April.

Michael Herzum, head of macro and strategy at Union Investment, said, according to Bloomberg News:

Don’t read too much into this month’s increase. Unfortunately the recovery so far is nothing more than a flash in the pan. Unpredictable US economic policy will continue to be a burden for the time being and stands in the way of dynamic growth in 2025.

Introduction: Looming US-China trade talks lift Asian stocks; China cuts interest rates – business live

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

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, governor of the People’s Bank of China, said the move was due to “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 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 US treasury secretary Scott Bessent on the sidelines of meetings in Switzerland between 9 and 12 May. 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 nearly 0.5% while the Shenzhen Composite gained 0.16%.

Stephen Innes, managing partner at SPI Asset Management, said:

That tepid market response speaks volumes. Because let’s be honest—this isn’t a rates problem, it’s a demand problem. China’s real economy isn’t thirsty for credit, it’s paralyzed by weak confidence, property rot, and collapsing export flows. You can lead the horse to water, but you can’t make it drink—especially when the water’s tainted with deflationary fear and policy fatigue.

European stock markets are set for a mixed open, with the UK’s FTSE 100 index seen opening slightly lower after its recent strong run while the German and French indices are expected to rise.

Traders are cautious ahead of the US Federal Reserve’s meeting tonight, where interest rates are expected to be left unchanged.

Oil prices are rising again, after yesterday’s 4% jump amid signs of higher demand in Europe and China, lower production in the US, tensions in the Middle East, a day after prices fell to a four-year low.

Brent crude is 1.1% ahead at $62.86 a barrel while US crude has risen by 1.3% to $59.86 a barrel.

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