Talks between the US and China broke down without any progress, but the two sides will resume discussions next week ahead of a 1 March deadline, after which Washington could increase tariffs on $200 billion in Chinese goods in the event of no deal.

Global stocks gained, boosted by signs that Beijing and Washington may be making progress in breaking the impasse in their trade dispute. The IMF lowered its outlook for global growth in 2019, citing risks to the Chinese economy and Brexit.

Global stocks rallied amid optimism as the US and China commenced new trade talks.

After the worst year for US, UK and European stockmarkets since 2008, weak Chinese manufacturing data caused global stocks to start 2019 in a nervous frame of mind while global government bonds rallied sharply.

Global equities fell sharply, with US stocks leading the retreat amid fears of a US government shutdown pushed volatility to its highest level since February. Both US and global equities are on course for their worst year in a decade. US stocks, in particular, tumbled on Christmas Eve amid concerns that President Trump was considering sacking Fed chair Jay Powell, but recovered these losses on Boxing Day when major benchmarks posted their largest one-day rise in almost 10 years amid White House assurances that the Fed chair's job was safe.

Global equities were heartened by news that China will cut their tariff on imported cars from 40% to 15%, but rising concerns over the outlook for global growth following weak data from the eurozone and China weighed on markets as the week progressed.

Stocks were volatile, initially rising on hopes of a trade truce between the US and China before falling sharply on news of the arrest in Canada of the CFO of Chinese telecoms giant Huawei on allegations that she had violated US sanctions against Iran.

The G20 summit got under way in Argentina, with attention focused on a meeting between President Donald Trump and President Xi Jinping where they will discuss the trade dispute between the US and China.

The UK and EU reached a draft agreement on the terms of the Brexit deal. While the deal gained UK cabinet approval, the prime minister faced a growing backlash from both Leavers and Remainers, although the pro-Brexit ERG failed to garner sufficient support to challenge the prime minister.

Global stockmarkets mostly trod water over the week as investors breathed a sigh of relief that the results of the US mid-term elections were broadly as expected.