SYDNEY (June 19): Asian stocks looked set to follow gains in global shares on optimism over progress in the U.S.-China trade war and indications of more stimulus from the European Central Bank. Treasuries climbed and oil surged. Futures pointed higher in Japan, Hong Kong and Australia.

The S&P 500 Index rose 1% after President Donald Trump tweeted he will meet Chinese President Xi Jinping at the G-20 summit next week, though gains were tempered by news his administration explored demoting Federal Reserve Chairman Jerome Powell in February. Ten-year Treasury yields came close to touching 2% before recovering.

The Fed is widely expected to strike a more dovish tone with its decision at the end of it’s two-day meeting Wednesday. Meanwhile, German 10-year yields tumbled further below zero as ECB President Mario Draghi said officials are ready with stimulus if needed, adding to expectations for easier global conditions.

Trump said Tuesday that he had a “very good” phone conversation with Chinese counterpart Xi Jinping. The two leaders will hold an “extended meeting” at the G-20 summit on June 28-29 in Osaka and “our respective teams will begin talks prior to our meeting,” Trump said on Twitter.

“Up until now, the markets have been quite skeptical that a Trump, Xi meeting would happen,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.

“This pivot to an attempt to get a deal done is certainly a lot of what’s driving the market.”

Elsewhere, oil surged to its biggest gain in five months as OPEC and its allies moved closer to a meeting to extend supply cuts while the Draghi’s comments raised hopes for increased demand.

Here are some key events coming up:

* The Fed, Bank of Japan and Bank of England all set monetary policy, along with central banks in Norway, Brazil, Taiwan and Indonesia.

* The Fed’s two-day meeting ends Wednesday with a decision and press conference. Officials are expected to debate a rate cut to shelter the U.S. economy, in part, from the fallout caused by escalating trade disputes.

* Final May CPI data for Britain are due on Wednesday. 

* U.K. retail sales are set for release on Thursday. 

These are the main moves in markets:

Stocks

* Futures on Japan’s Nikkei 225 climbed 1.3% in Singapore.

* Hang Seng futures earlier added 1.7%. 

* Futures on Australia’s S&P/ASX 200 Index gained 0.6%. 

* Futures on the S&P 500 Index were little changed. The underlying gauge rose 1% Tuesday. 

Currencies

* The yen was at 108.50 per dollar. 

* The offshore yuan held at 6.8999 per dollar. 

* The Bloomberg Dollar Spot Index was flat.

* The euro was at $1.1195.

Bonds

* The yield on 10-year Treasuries dropped three basis points to 2.06%.

* Australia’s 10-year yield fell two basis points to 1.35%. 

Commodities

* West Texas Intermediate added 0.2% to $54.01 a barrel after Tuesday’s surge.

* Gold was at $1,345.83 an ounce.