President Donald Trump wants to reach an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms, according to four people familiar with the matter.

The push for a possible deal with China was prompted by the president’s telephone call with Xi on Thursday, the people said, requesting anonymity to discuss internal deliberations.

Afterward, Trump described the conversation as “long and very good” and said in a tweet that their discussions on trade were “moving along nicely.”

Trump asked key cabinet secretaries to have their staff draw up a potential deal to stop an escalating trade conflict, the people said, adding that multiple agencies are involved in drafting the plan. It was unclear if Trump was easing up on U.S. demands that China has resisted, and reaching any accord still faces significant hurdles.

Eoin Treacy's view

The mid-term elections are on Tuesday so it is hard to view any political utterance as anything other than noise until that event has passed. The decision to write a draft proposal for a trade agreement does not mean it will be something the Chinese can sign without conceding defeat in the trade war so this is far from a settled topic. Nevertheless, even a word of encouragement for beaten down Chinese shares was enough to pressure shorts.

Tencent, which is among the worst performing mega-caps this year, posted an upside weekly key reversal.

Geely Automotive rallied today to break its progression of lower rally highs which increases potential for an additional reversionary rally.

The Hong Kong China Enterprises Index (H-Shares) also formed an upside weekly key reversal from the psychological 10000 level. Upside follow through next week would confirm at least a near-term low.