Stock rallies across Asia spread to European indexes and US futures on Wednesday as investors took comfort from some reassuring words about trade by one of President Donald Trump's closest advisors.
Speaking on Wednesday, National Economic Council Director Larry Kudlow said that the White House was having "a lot of communication with the Chinese government at all levels" ahead of Sunday's highly anticipated meeting between the president and his Chinese counterpart, Xi Jinping.
Kudlow added that there is a "good possibility" the two countries can reach some sort of trade agreement. That's a major flip from reports on Tuesday that a deal is "highly unlikely."
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Investors took Kudlow's comments at face value, sending shares in Asia, and particularly China, surging. All of China's major indexes closed more than 1% higher on the day, as did Hong Kong's Hang Seng, and Japan's Nikkei 225. In China, the biggest individual winner was the Shenzhen Composite, up 1.6%.
"Asian markets didn’t need to be told twice that Larry Kudlow considers a trade deal between the US and China an open possibility," Jasper Lawler, head of research at London Capital Group said on Wednesday morning. "Asian stocks powered higher as risk-on dominated."
Rising stocks in Asia pushed the Japanese yen, which typically rises in times of uncertainty, lower.
In Europe, stocks are also higher, albeit with much smaller gains. Around an hour into the trading day, the benchmark Euro Stoxx 50 index is up about 0.3%.
Trump and Xi are set to meet at this weekend's G20 summit in Buenos Aires, Argentina, with the aim of reaching a deal to prevent the 10% tariff on $200 billion worth of Chinese goods from increasing to 25% on January 1. If a deal cannot be reached, Trump has threatened further tariffs on Chinese goods, with the possibility of placing levies on all $500 billion of Chinese goods coming to the US.
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