Global financial markets extended gains yesterday, following solid gains on Wall Street as dogged trade optimism motivated those ready to take on more risk.

Global bourses had already sailed higher on Monday on expectations that economic superpowers China and the US were close to breaking the deadlock in trade talks. Those gains spilled over into yesterday following a report that US President Donald Trump might cut some tariffs on Chinese goods.

“Put simply, it has been another risk-on day,” remarked Fawad Razaqzada, an analyst at Forex.com.

Markets also rose on a reported easing in China’s one-year lending rate, while London traders welcomed a survey that showed Britain’s key services sector had avoided contraction in October.

“With the PBoC (People’s Bank of China) deciding to cut the one-year medium-term lending rate in China, it is clear that the bank remains committed to supporting the Chinese economy while negotiators work on removing the current US tariffs,” said IG analyst Joshua Mahony.

The Financial Times said yesterday that the White House is considering dropping existing tariffs on more than $100 billion of imports to seal a mooted deal with China that has teased investors many times already.

“When the US blinks, the world takes notice,” quipped analyst Neil Wilson at Markets.com

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