Terry Branstad, the U.S. ambassador to China in Beijing, said in an interview with The Wall Street Journal that the U.S. and China have yet to set a date for a summit to resolve their trade dispute, adding, preparations for such a meeting aren’t yet under way either.

Mr. Branstad said negotiators need to further narrow the gap in their positions, including over the enforcement of a potential deal.

Of course, the news coupled with concerns about global growth will “not favor risk-on sentiment” in the financial markets.

For now, U.S. stock futures as well as stocks in Europe and Asia are all in the “red.”

The dollar index also eased a bit from its close yesterday at 97.6670

The euro edged up somewhat to around $1.12 per euro

Gold is up by about $9 to about $1,294 per ounce at the moment of this writing (5:00 am NY time)

Over in the Euro area, Germany reported disappointing manufacturing orders, once again, that dropped unexpectedly by 2.6 percent month-over-month in January, missing market expectations of a 0.5 percent rise and following an upwardly revised 0.9 percent gain in December.

Annual growth improved slightly in January from minus 4.6 percent to minus 3.7 percent, although this was still its eighth consecutive sub-zero print.

New orders from the Euro area shrank 2.6 percent and those from third countries plummeted 4.2 percent.

Germany’s manufacturing orders’ level in January was the lowest since May 2017. It was also 2.0 percent below the fourth quarter average.

Meanwhile, the financial markets will have to continue to interpret the European Central Bank’s (ECB) prophetic pronouncements yesterday.

A lot of the market comments yesterday seem to be rather strained. It’s almost as if analysts started with the market reaction and then they worked their way back to the ECB’s position as best as they could.   

Yes, the ECB cut its growth forecast, but that was expected, and the ECB’s 3-month old forecast was obviously out of date and obviously too upbeat. There cannot have been too many surprises in that.

The guidance from the ECB is now that there will be no hikes in interest rates in the Euro area before next year. That was also expected, although the guidance was perhaps a little earlier than expected.

The early announcement yesterday of a third phase of the ECB’s TLTRO bank lending program was a surprise! (Targeted longer-term refinancing operations (TLTROs) are one of the ECB’s non-standard monetary policy tools.)

The TLTRO program itself was expected, but the early announcement seems to signal that the ECB has wished to remove as much uncertainty around this program as possible.

Overall therefore, the tone of the ECB was “dovish” although there is not that much in this that is different from expectations.

More of a moment of “spin” than a moment of “substance.”

Anyway, the divergence between the Federal Reserve and the ECB seems to remain well in place for quite some time, which will cause a weaker euro against the dollar. The downside resistance levels for the euro against the dollar are $1.1120 per euro, $1.1046 per euro and $1.0984 per euro.

Etienne "Hans" Parisis is a bank economist who has advised investors on financial markets and international investments.