Business live: Canada scraps digital tax to restart stalled US trade talks
China's manufacturing activity contracted for a third month in June, the official purchasing managers' index (PMI) showed. PMI rose to 49.7 in June from 49.5 in May, remaining below the 50-mark that separates growth from contraction and in line with economists' forecasts.
The figures suggest factories are battling to find domestic buyers as overseas sales slow in the face of the uneasy trade truce with the US. Beijing is unlikely to be able to meet its 2025 growth target of 'around 5 per cent' if the country's vast manufacturing sector stagnates or shrinks.
Asia shares strengthened as signs of progress in a trade standoff between the United States and Canada helped risk sentiment.
Japan's Nikkei rose 0.8 per cent and China's SSE Composites gained 0.25 per cent.
The FTSE 100 is forecast to open flat when trading begins shortly. The index rose as in a global rally on Friday, fuelled by growing optimism that the US and China are nearing a trade agreement.
Investors are also eyeing the progress of a huge US tax-cutting and spending bill making its way through the Senate. The Congressional Budget Office estimated the bill would add $3.3 trillion to the nation's debt, which could test foreign buyers' appetite for US government bonds.
Canada scrapped its digital services tax targeting US technology companies on Sunday, just hours before it was due to take effect and in a bid to advance stalled trade negotiations with the United States.
Canadian prime minister Mark Carney and US president Donald Trump will resume trade talks in order to agree on a deal by July 21, Canada's finance ministry said in a statement.
Trump abruptly called off trade talks on Friday over the tax, saying that it was a 'blatant attack' On Sunday, he had pledged to set a new tariff rate on Canadian goods.The breakdown in trade talks comes after the two leaders met at the G7 in mid-June, and Carney said they had agreed to wrap up a new economic agreement within 30 days.
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