LONDON, May 7 (Reuters) - What matters in U.S. and

global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial

Markets

Wall Street's latest stutter seems to have been cut short,

as stock futures welcomed the announcement of upcoming

U.S.-China trade talks and a fresh bout of monetary easing from

the People's Bank of China to boot.

In today's column, I discuss what the Trump administration's

use of "strategic uncertainty" means for the dollar.

Now, onto all of this morning's market news.

Today's Market Minute

* India attacked Pakistan and Pakistani Kashmir on Wednesday,

and Pakistan said it shot down five Indian fighter jets in the

worst fighting in more than two decades between the

nuclear-armed enemies. Indian shares were lower on Wednesday

morning, but had pared their early losses.

* U.S. Treasury Secretary Scott Bessent and chief trade

negotiator Jamieson Greer will meet China's economic tsar He

Lifeng in Switzerland this weekend for talks that could be the

first step toward resolving a trade war disrupting the global

economy.

* Chinese authorities announced on Wednesday a raft of stimulus

measures, including interest rate cuts and a major liquidity

injection, as Beijing steps up efforts to soften the economic

damage caused by the trade war with the United States.

* The moves in Asian FX markets in recent days have brought a

regional conundrum into sharp focus: how much appreciation can

Asian currencies countenance in the face of U.S. President

Donald Trump's global trade war? Read the analysis from Reuters'

columnist Jamie McGeever.

* Amid all the headlines around the U.S. minerals deal with

Ukraine, Washington has pursued a potentially even more

significant critical metals deal in the Great Lakes region of

Africa. Read the analysis from Reuters' columnist Andy Home.

Trade talks at last

Global stock markets held steady for the most part on

Wednesday, as oil prices rose and gold prices fell following

signs of a potential de-escalation in the U.S.-China trade spat.

U.S. and Chinese officials on Tuesday said Treasury

Secretary Scott Bessent and chief trade negotiator Jamieson

Greer will meet China's top economic official He Lifeng in

Switzerland this weekend.

Investors appear to remain cautious about prospects for any

breakthrough in tariff negotiations, though. The dollar was down

for a fourth session and European stocks dropped.

Meanwhile, China announced various stimulus measures on

Wednesday, including rate cuts, more cash for the banking system

and the expansion of a channel that helps insurance money flow

into stocks. But the big story remains what will happen with

U.S.-China talks this weekend.

All eyes will now turn to the Federal Reserve, which will

release its latest policy decision today. Its assessment of the

still-uncertain trade and inflation picture will be watched

closely, even though almost no one expects any move in interest

rates on Wednesday.

Over in Europe, jitters eased and the euro held steady after

German conservative leader Friedrich Merz was elected chancellor

in a second round of voting on Tuesday, after he failed to

secure a majority in the first attempt.

Geopolitical developments in Asia are jarring somewhat, as

India's military strikes on neighbouring Pakistan have increased

regional tensions. India's rupee fell slightly and stocks in

Pakistan slumped after the heaviest fighting in decades erupted

between the nuclear-armed neighbours.

Check out my column today, where I turn to the U.S. where

the Trump Administration's policy of 'strategic ambiguity'

appears to be having the desired affect on investors.

Chart of the day

China's central bank announced on Wednesday that it will

lower the borrowing cost of its seven-day reverse repurchase

agreements, its benchmark interest rate, by 10 basis points

(bps) to 1.40%, effective May 8. Other interest rates will drop

in line with the key rate.

These announcements came shortly after U.S. and Chinese

officials said the countries will meet in Switzerland this

weekend for talks.

The Chinese economy is already feeling the pain from the

triple-digit U.S. levies, with data last week showing factory

activity contracting in April at the fastest pace in 16 months.

Concerns have been rising over the impact the tariffs would

have on the job market and on the already-strong deflationary

pressures in China as exporters lose their biggest customer.

Today's events to watch

* U.S. Federal Reserve's Federal Open Market Committee

policy decision and press conference from Fed Chair Jerome

Powell

* U.S. March consumer credit

* German Chancellor Friedrich Merz meets French President

Emmanuel Macron in Paris

* Chinese President Xi Jinping visits Moscow

* Bank of England Deputy Governor Sarah Breeden speaks

* US corporate earnings: Walt Disney, Uber, Paycom,

DoorDash, Skyworks, Atmos, Corteva, Axon, Emerson Electric,

Verisk, Fortinet, Bunge, CF, Charles River, Rockwell, Bio-Techne

Texas Pacific Land, Marketaxess, Cencora, Vistra, Dayforce,

Trimble

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.