Updated June 27, 2019 10:20:40

Photo: US officials have given mixed signals about what to expect from trade talks between Donald Trump and Xi Jinping. (AP: Andy Wong)

Global share markets have traded cautiously ahead of this weekend's trade talks between US President Donald Trump and his Chinese counterpart, Xi Jinping, at the G20 summit in Japan.

However, the price of bitcoin jumped to an 18-month high amid the simmering geopolitical tension.

The mixed messages from top US officials about the likelihood of a trade deal also affected investor sentiment.

US Treasury Secretary Steven Mnuchin told CNBC that a deal between the two nations was "about 90 per cent" complete, which caused markets to initially perk up.

But his comments were later restated to show he was using the past tense to describe progress in the talks.

Mr Trump said that while it was "absolutely possible" to avoid imposing additional tariffs on imported Chinese goods he was "very happy where we are now".

"We're taking in a fortune, and frankly [it's] not a very good thing for China, but it is a good thing for us," Mr Trump added.

Trade talks between the two economic giants collapsed last month, prompting the US and China to slap retaliatory tariffs, worth hundreds of billions of dollars, on each other's imports.

Markets on edge

On Wall Street, the Dow Jones index fell 11 points, practically flat, at 26,537.

It's almost inconceivable that the immediate future of the global economy hangs on the erratic whims of Donald Trump, writes Ian Verrender.

The benchmark S&P 500 slipped 0.1 per cent, while the tech-heavy Nasdaq rose 0.3 per cent.

European markets also had a mixed performance, with London's FTSE losing 0.1 per cent and Germany's DAX adding 0.1 per cent.

"Last week the market had a clear path of what to focus on, a rate cut in July and Trump and Xi meeting at the G20 to discuss reopening trade negotiations," said Robert Pavlik, chief investment strategist at SlateStone Wealth.

"What has happened since is this government has muddied the waters and confused the market."

The Australian dollar, meanwhile, lifted modestly to 69.8 US cents.

However, its strongest gain was against the Japanese currency, jumping 0.9 per cent to 75.3 yen.

Bitcoin surges, thanks to Facebook

The largest digital currency, bitcoin, surged to around $US13,700 on Wednesday (local time).

Can't tell a bitcoin from a blockchain? Read our explainer to see how the cryptocurrency works.

However, it has since fallen to $US12,699 at 8:20am (AEST).

It was driven by investors hoping that Facebook's development of its own digital currency could push these alternative assets into the mainstream.

So far this year, bitcoin has risen more than 260 per cent, although it remains below its all-time high of nearly $US20,000, which it hit in December 2017.

Investors have flocked back to digital currencies after a bruising 2018.

Bitcoin has risen for eight consecutive days, after Facebook said it would offer its own cryptocurrency, the Libra coin, by the end of June 2020.

Analysts say Facebook's announcement this month has revived interest in digital currencies, while investors seeking safety have also pushed up bitcoin's price.

"Cryptocurrency traders were reinvigorated by Facebook's launch of their own digital coin and momentum appears to be stirring up fresh new investors," said Edward Moya, senior market analyst, at online foreign exchange broker OANDA.

"Bitcoin sceptics are cautious in trying to stop this surge and may look for the next key resistance level which is $US15,000."

ABC/Reuters

Topics: business-economics-and-finance, markets, stockmarket, currency, australia

First posted June 27, 2019 07:50:55