‘Substantial progress’ after trade talks with China, US says

Today’s agenda: Ukraine-Russia talks in Istanbul; Christine Lagarde under fire over workers’ rights; UK immigration clampdown; shrinking graduate wage premium; and Nigeria’s oil industry

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Good morning. We begin with an update on trade talks between the US and China in Geneva over the weekend. Treasury secretary Scott Bessent said yesterday that “substantial progress” was made over two days of discussions with Chinese officials, in the first sign that Washington and Beijing might start to ratchet down economic tensions.

Trade talks optimism: “We will be giving details tomorrow, but I can tell you that the talks were productive,” Bessent told reporters after he and US trade representative Jamieson Greer finished their meetings with Chinese vice-premier He Lifeng. 

The optimistic comments from the US negotiating team were the first sign that the two countries could de-escalate the trade war that has roiled financial markets and triggered concerns about global supply chains.

Market reaction: Following the briefing, US futures for the S&P 500 and Nasdaq rose 1.3 per cent and 1.7 per cent, respectively. Chinese equities were also up, with Hong Kong’s benchmark Hang Seng index rising 0.8 per cent in early trading on Monday, while mainland China’s CSI 300 climbed 0.6 per cent.

The dollar strengthened 0.3 per cent against a basket of its peers and the renminbi edged up 0.1 per cent to Rmb7.23 per dollar. Gold fell 1.8 per cent to $3,265 per troy ounce. Follow our live blog for the latest developments.

• Exclusive: Chinese companies are accelerating a purge of foreign components from their supply chains as part of the country’s drive towards self-reliance amid the US trade war.

• The Big Read: Beijing’s aggressive pursuit of energy self-sufficiency could give it the upper hand in the trade war with Washington.

Donald Trump’s return to the White House has triggered heightened tensions with China, raising big questions for global business, markets and the rest of the world. Join us on May 28 for insights into the most consequential geopolitical rivalry of our time. Register now and put questions to our panel.

Here’s what else we’re keeping tabs on today:

• UK: Foreign secretary David Lammy will host counterparts and officials from France, Italy, Germany, Spain, Poland and the EU during a “Weimar+” meeting in London.

• Central banks: Clare Lombardelli, Bank of England deputy governor for monetary policy, gives a keynote speech at the bank’s Watchers’ Conference at King’s Business School, London.

• Results: Petrobras and UniCredit report.

Five more top stories

1. Two of Europe’s most powerful trade unions have accused European Central Bank president Christine Lagarde of undermining workers’ rights over proposed changes to an influential body that represent staff interests, escalating a long-running and bitter feud over labour relations.

2. Volodymyr Zelenskyy has said that he is ready to start peace talks with Vladimir Putin in Istanbul on Thursday, after Donald Trump told the Ukrainian president to meet his Russian counterpart there “immediately”. Zelenskyy’s announcement came after a back-and-forth in which Kyiv called for Moscow to agree to a 30-day unconditional ceasefire starting today. Read more on the prospects for the Istanbul talks.

3. Sir Keir Starmer’s government will face a High Court challenge this week over the export of components for the F-35 fighter jet used by Israel. Campaigners at Palestinian human rights organisation Al-Haq are taking legal action against the Department for Business and Trade over the UK’s supply of critical parts for the combat aircraft. Read more on the case.

• More on the Israel-Hamas war: Hamas said it would release Edan Alexander, believed to be the last living Israeli-American hostage held by the Palestinian militant group, ahead of Trump’s visit to the Middle East this week.

4. Migrants to the UK will need to spend a decade in the country before applying to settle unless they can show “a real and lasting contribution to the economy and society”, ministers are set to announce today. The proposal to end automatic settlement after five years is part of a sweeping set of changes to the immigration system. More details here.

5. A proposed law in California could derail efforts to liberalise the US legal market and curb competition from private equity and accounting firms seeking to take business from traditional law firms. The bill, passed unanimously by the state assembly last month, comes as alternative-structure law firms spring up.

News in-depth

As oil majors withdraw from Nigeria’s onshore oil industry, locally led companies have started investing large sums to buy up assets in an effort to move up the value chain, from providing ancillary services to operating their own oilfields. Here are the groups leading the historic shift in the country’s oil wealth ownership.

We’re also reading . . . 

• Gulf tour: As Trump touches down in Saudi Arabia this week, expectations of securing multibillion-dollar deals are running high. The biggest one of all, however, is likely to elude him.

• Film tariff plan: As with so many Trump ideas, the proposal to help Hollywood may be flawed economically, but it’s smart politically, writes Rana Foroohar.

• Calls for new compass: Amid the challenges of new world order, the EU continues to cling to a status quo ante, writes Marc De Vos, co-chief executive of the Itinera Institute think-tank.

• Scenario planning: Increased uncertainty and quickly evolving risks are putting stress test corporate strategies under scrutiny, writes Anjli Raval.

Chart of the day

Graduates in the UK are increasingly questioning whether going to university was worth it. The worry is that a cyclical slowdown in the wider British labour market could be masking a more lasting decline in the value of a degree. Data from recent years points to a shrinking graduate wage premium — especially for women early in their career. 

Take a break from the news

As Warren Buffett steps down from Berkshire Hathaway, his annual investor’s letters to shareholders will be missed. For decades they have been one of the financial world’s most insightful, cheering and best-read documents. Why can’t other heavyweights write more like him, asks Pilita Clark.