The pound was barely moved after Tuesday’s brief rally in reaction to Boris Johnson’s election to replace Theresa May as British prime minister, with investors keen to see whether the leading Brexiter pushes ahead with a no-deal divorce from the European Union.

While Federal Reserve officials are blocked from speaking on policy ahead of a crucial meeting next week, their decision on how far to cut interest rates is the big question on trading floors.

However, investors are still keeping an eye on the corporate reporting season, which has been broadly positive.

The latest big-name firms to post positive results were Coca-Cola, toymaker Hasbro and Harley-Davidson, helping all three main indexes on Wall Street end with sharp gains.

Adding to the upbeat mood were reports that US President Donald Trump’s Trade Representative Robert Lighthizer will lead a delegation to China next week to resume trade talks.

The meeting would be the first head-to-head since negotiations were cut short in May by Trump’s surprise decision to hit China with more tariffs for what he called Beijing’s backsliding.

Since then, he has met Chinese leader Xi Jinping on the sidelines of the G20 in Japan, where they agreed to get both sides back around the table.

Johnson’s ‘do or die’

But Vanguard Markets’ Stephen Innes said: “While the trade conversation remains high on the list of supportive factors for equity market this week, investors’ risk barometers are completely dialled in on the amplitude of the US Federal Reserve’s next easing cycle as the looser the policy, the higher equity markets will soar.”

Hong Kong gained 0.6% in the afternoon and Shanghai finished 0.8% higher, while Tokyo ended up 0.4%.

Sydney gained 0.8% and Singapore put on 0.1% while Bangkok was also higher.

But Taipei slipped 0.1% and Mumbai shed 0.6%.

Seoul was down 0.9% with market heavyweights Samsung and SK Hynix both sharply lower on worries about the impact of the simmering trade row with Japan that threatens to hit South Korea’s crucial tech industry.

In early trade, London dipped 0.2% while Frankfurt added 0.2% and Paris put on 0.1%.

There was little reaction to the International Monetary Fund’s decision to lower its global growth forecast for this year and next owing to trade tensions, economic uncertainty and rising prospects for a no-deal Brexit. The Fund said the world faced a “precarious” 2020.

On currency markets, the pound remained stuck around two-year lows against the dollar after Johnson’s expected leadership win, which means he will be appointed prime minister later Wednesday.

“Boris Johnson has vowed to deliver Brexit by the October 31 deadline, ‘do or die’,” said Quentin Fitzsimmons, an asset manager at T. Rowe Price, adding this would be a tough ask as he comes up against the same problems that befell Theresa May.

“The UK parliament has rejected the withdrawal agreement that May struck with the European Union, the EU has stated firmly that it will not renegotiate that agreement, and the majority of members of parliament remain opposed to the UK leaving the EU without a deal being agreed upon.”