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Investing.com - Hopes for progress in the long running Sino-U.S. trade war will continue to set the mood in markets this week after the world’s two largest economies agreed on Saturday to restart talks.
Investors will also be looking ahead to the U.S. jobs report for June on Friday in what will be a holiday-shortened week. U.S. markets will be closed for the Independence Day on Thursday and they will close early on Friday.
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Meanwhile, OPEC is set to meet early this week and is expected to extend oil output cuts after a weekend agreement between Russia and Saudi Arabia paved the way for a deal.
Here’s what you need to know to start your week.
1. Trade talks
The U.S. and China agreed on Saturday to restart trade talks after U.S. President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing.
No deadline was set for progress on a deal, and the two sides remain at odds over significant parts of an agreement. The last major round of talks collapsed in May.
Financial markets, which have been rattled by the nearly year-long trade war, are likely to cheer the truce. Washington and Beijing have slapped tariffs on billions of dollars of each other's imports, threatening to put the brakes on an already slowing global economy. Those tariffs remain in place while negotiations resume.
2. U.S. economic data
The U.S. June jobs report, due on Friday, will likely factor into the Federal Reserve’s decision on interest rates at its next meeting in late July.
The economy is expected to have created 164,000 jobs in June while interest rate futures indicate 100% odds of a 25 basis-point cut on July 31.
But traders might be getting ahead of themselves. Fed Chairman Jerome Powell has pushed back on rate-cut pressure. And the economy looks generally robust - unemployment, at 3.6%, is at its lowest in half a century and it likely stayed there in June.
Other notable data releases on the economic calendar include the latest surveys from the Institute for Supply Management on U.S. manufacturing and service sector activity, as well as reports on factory orders and trade.
3. Fed speakers
Fed Vice Chair Richard Clarida is due to speak on Monday. Earlier this month, he said that the central bank is prepared to lower interest rates if necessary, but noted that the broad outlook for the U.S. economy remains positive.
New York Fed President John Williams is due to participate in a panel discussion about the global economic and monetary policy outlook in Zurich on Tuesday.