* Asian stock markets : tmsnrt.rs/2zpUAr4
* E-minis for S&P500 and Dow rally, Nikkei futures rise
* WSJ reports Trump-Xi trade summit likely this month
* Dollar subdued on modest inflation expectations
By Swati Pandey
SYDNEY, March 4 (Reuters) - U.S. stock futures jumped on Monday on reports the United States and China were close to striking a trade deal after a year-long tariff skirmish while the dollar eased as traders wagered Federal Reserve policy will remain accommodative.
The Wall Street Journal reported Washington could lift most or all of its tariffs on Beijing while a summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping to sign a final trade deal could happen later this month.
That followed comments from Trump on Friday that he had asked China to immediately remove all tariffs on U.S. agricultural products because trade talks were progressing well. He also delayed previously scheduled plans to impose 25 percent tariffs on Chinese goods.
All of that proved positive for risk sentiment with E-mini futures for the S&P500 and the Dow gaining 0.4 percent each while Japan’s Nikkei futures climbed 0.6 percent.
The risk-on mood also sent the Australian and New Zealand dollars higher.
“The market continues to gain confidence given news around trade talks between the United States and China,” ANZ economists said in a morning note to clients.
“However, weakening U.S. data have dented some of this optimism.”
A slew of surveys has highlighted how much manufacturers are suffering worldwide, particularly those exposed to China’s slowdown, and added to expectations that central bank policy tightening is as good as finished.
In the United States, ISM data showed manufacturing activity for February dropped to its lowest since November 2016, while the University of Michigan survey showed consumer sentiment fell short of expectations in the month.
In addition, a U.S. Commerce Department report showed tame inflation pressures and U.S. personal income falling for the first time in more than three years in January.
The modest inflation lends support to the Federal Reserve’s patient posture on hiking U.S. interest rates, analysts said.
The dollar index slipped against a basket of major currencies from Friday’s one-week high of 96.551. It was last down 0.2 percent at 96.356.
Against the Japanese yen, the dollar was mostly unchanged at 110.71.
The euro held in familiar ranges and was last at $1.1376.
Editing by Sam Holmes