Rumors of a Possible U.S.-China Trade Deal Boost Markets’ Expectations
Published on: 12/12/19 11:11 AM
The U.S. and China have been locked in a trade war since President Donald J. Trump came to power. The trade war has often caused the markets to tumble, and most traders look forward to when it will be over. For now, rumors of a possible phase one trade deal have stabilized the markets, and the markets are expected to surge if the deal goes through.
Forex broker comparison service FXBrokerFeed brings you news and trends in the FX broker market regarding a likely trade deal between the U.S. and China, and its effects on the markets.
An Eleventh-Hour Trade Deal
President Trump has threatened to slap china with new tariffs on 15% on $160 billion worth of Chinese exports. The tariffs are set to kick in on Sunday, and they target good popular with holiday shoppers. However, analysts
now believe that the new tariffs will be averted before the due date, and they credit this for the stability currently experienced in the markets.
The Wall Street Journal has reported that key players from both countries are working hard to avert further escalation of the ongoing trade war. Kenny Polcari, a senior market strategist with Slatestone Wealth, is on record saying that a phase-one deal is likely. “They’re going to come out and say ‘we’ve got a deal… we’re working on tweaking, fine-tuning it. But, to show good faith, we’re not going to impose these tariffs,’ and then the markets will rally,” he says.
Good for the Markets
The markets have been relatively stable since it was announced that both countries were working on finalizing a phase-one deal. The markets
are also expected to rally if the deal goes through, according to several analysts. Eric Robertson, the global head of foreign exchange at Standard Chartered Bank, is confident that the markets will rally when both sides issue statements before the fateful Sunday. However, he urges traders to keep an open mind and expect a delay in tariffs if the deal doesn’t go through.
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