The FTSE 100 (^FTSE) was flat while European stocks dipped early on Wednesday morning as China reportedly criticised the trade deal between the UK and US, saying it could be used to squeeze products from the world's second largest economy out of Britain’s supply chains.

The deal, which was announced on Thursday last week, includes strict security requirements for the UK's steel and pharmaceutical industries.

Beijing told the Financial Times that it is a “basic principle” that agreements between countries should not target other nations.

"Co-operation between states should not be conducted against or to the detriment of the interests of third parties," China’s foreign ministry said.

London’s benchmark index (^FTSE) was treading water in early trade Germany's DAX (^GDAXI) dipped 0.1% and the CAC (^FCHI) in Paris headed 0.4% into the red The pan-European STOXX 600 (^STOXX) was down 0.1% Wall Street is set for a positive start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green. The pound was 0.3% up against the US dollar (GBPUSD=X) at 1.3344.

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21 mins ago

LaToya Harding

Asia and US overnight

Stocks in Asia were mostly higher overnight but the Nikkei (^N225) lost 0.1% on the day in Tokyo despite data showing Japan’s PPI inflation coming in at 4.0% in April as expected.

The Hang Seng (^HSI) rose 2.2% in Hong Kong and the Shanghai Composite (000001.SS) was 0.9% up by the end of the session. The Kospi (^KS11) also rose 1.2%

Elsewhere, Australia’s Q1 wage index came in stronger than anticipated, up 0.9% quarter-on-quarter, compared to the 0.8% expected, and yields on 10-year Australian government bonds are up 4.1bps this morning.

Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.7%, which has only just turned positive for 2025 again, and the tech-heavy Nasdaq (^IXIC) was 1.6% higher. The Dow Jones (^DJI) slipped 0.6%.

It comes as markets continue to dial back expectations for cuts from the US Federal Reserve this year, driven by the broader risk-on tone and lower recession fears, rather than the soft inflation print.

Futures were only expecting 53bps of cuts by the December meeting, which was -3.2bps lower on the day, and the fewer cuts priced for this year since February.

President Donald Trump continued to call for lower rates, saying in a post that “THE FED must lower the RATE, like Europe and China have done.”

Economists will be watching tomorrow’s PPI data closely for categories that feed through into core PCE, the Fed’s preferred inflation gauge. Deutsche Bank said it now sees April core PCE tracking at +0.23% month-on-month, which would be consistent with the year-on-year rate remaining at 2.6%.

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LaToya Harding

Coming up

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy.

To the day ahead, data releases include Canada March building permits.

For Central Bank speakers, expect Fed’s Waller, Jefferson and Daly speak, ECB’s Nagel and Holzmann speak, and BOE’s Breeden speak.

Earning releases in the US include Tencent, Cisco, Sony, and Coreweave.

Here's a quick look at what else is on the agenda for today:

7am: Trading update: Burberry, Compass Group, Victorian Plumbing, Spirax-Sarco 7am: Germany Consumer Price Index 12.00pm: US MBA mortgage applications 3.30pm: US EIA crude oil stocks

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