The risk sentiment got hit again by fresh comments by the US President on trade, citing that “China broke the deal” on the trade talks. The economic releases will continue to play a second fiddle to the developments surrounding the US-China trade talks and UK politics, with the former likely to remain the key market driver. Markets await the outcome of a fresh round of trade talks between the Chinese Vice-Premier Liu He and the US top diplomats later today.

The safe-haven Yen received a fresh lift at the expense of the risk assets, as a result USD/JPY quickly surrendered the 110.00 handle on Trump’s trade risks and hit fresh lows below 109.70 region. Amongst the European currencies, the EUR/USD pair traded modestly flat, capped by the 1.12 handle. Pound regained the 1.3000 barrier but lacked further upside momentum amid ongoing UK political uncertainty surrounding the Brexit deal.

On the data front from the European calendar, we had only the Spanish industrial output figures at 07:00 GMT, which had virtually no impact on the EUR markets.

The NA calendar remains eventful, with macro news from the US docket, including the key PPI, trade balance and weekly jobless claims, all of which will drop in at once at 12:30 GMT. At the same time, the speech by the Fed Chair Powell will hog the limelight. Later, the US wholesale inventories data will be reported at 14:00 GMT, soon after the Fed member Bostic’s speech due at 13:45 GMT. The speech by the Chicago Fed President Evans will also be eyed fresh trading impetus.

Oil slips to $61.50, despite a surprise drop in EIA inventory and the threat to global oil supplies from US-Iran rift, amid concerns over the escalating trade battle between the United States and China.

Gold prices edged up on Thursday as investors focus on the two-day trade talks in Washington later in the day to see whether Chinese negotiators could convince the White House to back down on a possible tariff hike on Chinese imports. Overnight, Trump said China "broke the deal" in the ongoing U.S.-China trade talks, blaming Beijing for trying to re-negotiate and slowing down the progress of the discussions.