By Philip Blenkinsop

BRUSSELS (Reuters) – Will U.S. President Donald Trump’s much-heralded meeting with Chinese counterpart Xi Jinping in Argentina on Saturday lead to an easing of the Sino-U.S. trade conflict?

That has been the main question of financial and commodity markets leading up to the G20 summit in Buenos Aires. The answer is likely to steer investors at the start of the coming week.

Signals leading up to the meeting were at best mixed.

“I think we’re very close to doing something with China, but I don’t know that I want to do it,” Trump said as he set out on his journey from the White House.

The state-run China Daily newspaper said any deal was unlikely to be a comprehensive solution to the impasse due to “diverging demands and agendas”.

Economists at UBS expressed hope that a positive message could at least emerge, with a path towards resolution sometime next year, but that recent U.S. actions and statements had tempered their optimism.

ING was downbeat on a breakthrough coming soon, adding that two sides remained far apart on the extent to which China’s trade surplus with the United States could be reduced.

ING Bank forecasts that global trade growth will slow from 2.6 percent this year to 1.3 percent in 2019, the weakest rate since 2009, when the global financial crisis was at its height.

The estimate is based on an intensified U.S.-China trade war in which Washington increases tariffs on $200 billion of products to 25 percent in January from 10 percent now and then targets the $267 billion of Chinese exports not already subject to measures.

Without that, global trade growth could be unchanged at 2.6 percent. However, if Trump also decides to hike import duties on cars, that growth would slump to 0.5 percent next year, ING says.

Trump has threatened for months to impose auto tariffs, notably those made in Europe, although he has pledged to refrain from doing so for the European Union and Japan as long as it makes constructive progress in trade talks with the pair.

However, Trump reignited speculation on Wednesday by saying new auto tariffs were “being studied” and asserting they could prevent jobs cuts such as the layoffs and plant closures announced by General Motors Co.

Economists at Citi believe any tariffs would apply to finished vehicles but not to auto parts and the principal question is not if, but when, they will be unveiled.

As speculation has intensified, top executives from German carmakers Volkswagen, BMW and Daimler, previous targets of Trump’s criticism, are set to visit the White House next week.

OPEC CUTS, U.S. JOBS SPIKE?

Once markets have absorbed the fruits of the Trump-Xi exchange, investors may shift focus to at least two events at the end of the week.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies meet on Dec. 6-7 and are expected to discuss a possible production cut. Oil prices have fallen by more than 20 percent in November, to make it the biggest monthly drop in a decade.

The United States will also report its widely watched monthly jobs report on Friday.

Economists polled by Reuters forecast that the unemployment rate will hold at a 49-year low of 3.7 percent and that year-on-year wage growth will also match the 3.1 percent of October, itself a nine-and-a-half-year high.

The figures, if confirmed, should make it a near-certainty that the Federal Reserve will raise interest rates for a fourth time this year at its Dec. 18-19 meeting, even as its chairman Jerome Powell signals a more cautious approach on future rate hikes next year.

“While sentiment may be a bit gloomy after the fallout from G20 meeting the more positive tone to the U.S. macro story could improve spirits as we move through the week,” said James Knightley, chief international economist at ING.

(Reporting by Philip Blenkinsop; Editing by Richard Balmforth)