After two days of talks in London, the US and China have managed to extend their trade war truce. Just before midnight the two countries agreed a framework that, it is hoped, will ease tensions between the two economic superpowers. It will reinforce their initial agreement made in Geneva a month ago, once presidents Donald Trump and Xi Jinping have approved it. Speaking at Lancaster House last night, the US commerce secretary, Howard Lutnick, said the trade framework and implementation plan agreed with China in London should result in restrictions on rare earths being resolved. That had been a key demand for the US side, worried that American companies were being starved of vital supplies. Lutnick told reporters the US negotiating team will take the framework back to Trump to get his approval, and then hope to implement it. China’s vice commerce minister Li Chenggang described the talks as “rational and candid”, saying: "The two sides have, in principle, reached a framework for implementing the consensus reached by the two heads of state during the phone call on 5 June and the consensus reached at the Geneva meeting.” Shares have risen in China, as traders appear to welcome the trade framework agreed in London last night. The CSI 300 index is up about 0.8% in late trading. Hong Kong’s Hang Seng index is up 1%, while South Korea’s Kospi has gained 1.3%. European stock markets have opened higher. The FTSE 100 share index has gained 22 points, or 0.25% to 8,875 points. That takes the index towards its record high of 8,908 points, set in March before the trade war turmoil hit the markets. Prudential (+2.3%) and Standard Chartered (+2%), which are focused on Asia-Pacific markets, are leading the risers. Mining stocks are also rising, reflecting hopes that a damaging trade war that would hurt demand for commodities can be avoided. France’s Cac and Germany’s Dax share indices are up about 0.2%. The agenda • Noon BST: US weekly mortgage applications data • 12.30pm BST: the chancellor, Rachel Reeves, to announce UK spending review • 1.30pm BST: US inflation report for May We'll be tracking all the main events throughout the day …
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