European stocks look set to open a tad higher on Wednesday despite a fresh flare-up in U.S.-China trade tensions.
Gold pushed towards $1,500 and the Japanese yen held Tuesday's gains against the dollar after U.S. Commerce Secretary Wilbur Ross said that inking a trade deal after the 2020 presidential election could give the U.S. the upper-hand during future negotiations.
The statement came after President Donald Trump told reporters at a NATO summit in London that a potential trade deal is only dependent on whether he wants to sign it.
As expectations for a U.S.-China trade deal fade, another round of China tariffs - due 15 December - might become reality.
Meanwhile, China has reacted angrily after the U.S. House of Representatives overwhelmingly approved a bill requiring the Trump administration to toughen its response to China's persecution of its Muslim minority, demanding sanctions on Chinese officials and export bans.
In economic releases, China's private sector expanded at the steepest pace in 21 months in November driven by the upturn in manufacturing and services, survey results from IHS Markit showed.
The Caixin composite output index rose to 53.2 from 52.0 in October. The services Purchasing Managers' Index advanced to a seven-month high of 53.5 from 51.1 in October.
Final composite Purchasing Managers' survey results from euro area and the U.K. are due later in the session, headlining a light day for the European economic news.
Across the Atlantic, traders are likely to keep an eye on reports on private sector employment and service sector activity for direction.
U.S. stocks ended lower for the third straight session overnight after Trump cast doubt over the potential for a trade deal with China this year.
The Dow Jones Industrial Average shed 1 percent, the tech-heavy Nasdaq Composite dropped 0.6 percent and the S&P 500 gave up 0.7 percent.
European markets ended mostly lower on Tuesday amid the re-escalation of global trade tensions.
The pan-European Stoxx Europe 600 index declined 0.6 percent. France's CAC 40 index lost 1 percent and the U.K.'s FTSE 100 slumped 1.8 percent while the German DAX edged up 0.2 percent.