European stocks seen slightly higher on report of US-China trade breakthrough

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European shares are set to begin Thursday’s session in the black after a report said the U.S. and China are making swift progress in trade talks.

Britain’s FTSE 100 was seen 26 points higher at 7,206, Germany’s DAX 5 points higher at 11,418 and France’s CAC up 11 points at 5,312, according to IG index data.

Markets appear to be getting a slight boost from news of progress in U.S.-Sino trade negotiations. A Reuters report said China has offered “unprecedented” proposals to allay U.S. concerns over forced technology transfers. Officials from both countries are due to meet for a fresh round of discussions Thursday.

But gains look set to be capped by lingering jitters over a slowdown in economic growth. Bond markets have in the past week signaled a U.S. recession may be coming, with the U.S. 10-year Treasury yield recently falling below that of the 3-month bill, in what is known as a yield curve inversion.

The yield on the 10-year Treasury fell to its lowest level since December 2017 on Wednesday, leading to declines on Wall Street that spilled over into Asian trade. MSCI’s broad index of Asian shares excluding Japan dropped over 0.1 percent in early morning trade Thursday.

Back in Europe, the fate of Brexit looked as uncertain as ever. British Prime Minister Theresa May offered to resign if her twice-defeated withdrawal deal was finally passed by Parliament, in a move that failed to impress some hardline Brexiteers and Northern Ireland’s DUP party.

Meanwhile, U.K. lawmakers voted on a number of Brexit alternatives overnight, none of which gained majority support, producing further doubt as to whether Britain will manage to break an impasse to get a Brexit agreement through Parliament.

In corporate news, Nordic-Baltic lender Swedbank is due to hold its annual general meeting on Thursday. The embattled bank was raided by authorities on Wednesday as part of an investigation into money laundering. Reports have said the firm is also facing a separate probe from U.S. regulators.

On the data front, Spanish and German inflation figures for March are due to be released Thursday morning.

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