U.S. and Chinese officials said they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences.

China's Vice Commerce Minister Li Chenggang said the two teams had agreed on implementing their Geneva consensus and would take the agreed framework back to their leaders.

MARKET REACTION:

Share markets and the dollar were guarded, with S&P 500 futures down 0.3%, while awaiting more detail of what was decided and whether it would stick.

QUOTES:

CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE, MELBOURNE:

"The devil will be in the details but the lack of reaction suggests this outcome fully expected.

"While clearly a positive outcome, the lack of reaction in S&P500 futures, and the incremental moves seen in CNH or AUD, suggests achieving the framework on the Geneva agreement was fully expected – the details matter, especially around the degree of rare earths bound for the US, and the subsequent freedom for US produced chips to head East, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported."

LIN GENGWEI, CO-FOUNDER AND CEO, RAIN TREE PARTNERS, SINGAPORE:

"Both sides have the pressure, and willingness to reach an agreement. This is temporary achievement in talks but will not alter the pattern of perennial Sino-U.S. rivalry.

"The U.S. will not completely remove restrictions on chip exports to China, but may relax the curbs in response to pressure from both Beijing and the domestic semiconductor sector."

MARK DONG, CO-FOUNDER OF MINORITY ASSET MANAGEMENT, HONG KONG:

"This is positive news to the market. At least now there's a bottom line that neither side is willing to cross.

"Going forward, both sides will move toward reducing the trade imbalance."

ZENG WENKAI, CHIEF INVESTMENT OFFICER, SHENGQI ASSET MANAGEMENT, HONG KONG:

"The market likely anticipated this — Trump is just TACO (Trump always chickens out)."

"Look at how countries are negotiating with the U.S. these days; it’s no longer like how Vietnam approached things early on. Japan and South Korea are taking a tougher stance. People have realized that kneeling gets you nowhere — in fact, it only invites more bullying."

CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE:

"Markets will likely welcome the shift in tone from confrontation to coordination. But with no further meetings scheduled, we’re not out of the woods yet. The next step depends on Trump and Xi endorsing and enforcing the proposed framework.

"It’s important not to mistake this tactical de-escalation for a full reversal of strategic decoupling. The underlying competition around technology, supply chains, and national security remains very much intact. New issues can always emerge, and the real test will be how far this "new old deal" is implemented."

TAN XIAOYUN, FOUNDING PARTNER OF ZONSO CAPITAL, GUANGDONG:

"Talks will continue under the agreed framework, and I believe the U.S. will give in more than China to reach a deal."

"Under the current circumstances, the U.S. side faces more pressing challenges, while the Chinese side has more breathing space. China was defensive, but has turned offensive, leveraging on rare earth and market access. This marks a rebalancing in strength and clout."

MICHAEL MCCARTHY, CHIEF EXECUTIVE OFFICER, MOOMOO AUSTRALIA, SYDNEY:

"I'll be watching to see how bonds trade today on the back of this. The currency markets are taking it in stride, and given the equity markets are back to all-time highs or thereabouts, it does appear that this was very much anticipated.

"For weeks, there have been expectations of the deal. The delivery of it will likely be a market positive, with a weakening dollar and stronger equities, but it’s not a step change."

CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:

"I think in this environment... any hints on progress on a potential trade agreement will be positive for markets.

"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement. That sort of comprehensive deal usually takes years to be reached, so I'm skeptical that a framework reached at the meeting in London will be comprehensive. Tensions might be de-escalated for now, but they will certainly escalate again in coming months."

RAY ATTRILL, HEAD OF FX STRATEGY AT NATIONAL AUSTRALIA BANK, SYDNEY:

"It's way too early to say that we know we're in the midst of establishing a cast iron, new US-China trade agreement. The whole year has been littered with positive omens about reaching agreements and then we haven't really seen substantial progress or we've seen backsliding on things that were seemingly agreed so.

"Our view is still that whatever does get agreed in the coming weeks and months, the baseline view is that we're going to end up with a global tariff situation which is far worse than existed prior to Trump's ascent to the presidency so we're still going to have a tariff environment we believe will be detrimental as far as global growth is concerned."

TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY:

"If we keep the terms of the Geneva Agreement, we're looking at US tariffs on Chinese goods staying at 30% for a period of time and Chinese tariffs on US goods at 10%. So that's down from 145% and 125% respectively. That would be fantastic.

"Now that for me was probably the market consensus ... and now people just trying to work out whether they're gonna buy or sell the US dollar and that's I think reflecting a bit of that indecision.

"That's why U.S. equity markets are holding at this point of time. I still feel like they're overcooked and they need to pull back. It's just been a remarkable run and we're sort of pushing up now against the record highs from February, so for me, it would make sense for them to take a breather."

DAVID CHAO, GLOBAL MARKET STRATEGIST, ASIA PACIFIC, INVESCO, HONG KONG:

"The recent headlines that we've seen is that the US and China - they're ready to make a deal, I think from both sides, and that is a very good sign for markets as well as for policymakers in both countries. Because ultimately, cooler heads will prevail, and we think that the road has been laid for closer dialog between the top leaders between the two countries.

"Today's news about the US and China striking a potential deal on things like rare earths or access to semiconductors or jet engine equipment, that is a very good indication that we have moved through peak tariff uncertainty."