Investors respond to a complexity between the USA and China
Investors in trade talks between the US and China over the weekend have been positively voicing, which has softened the trade war between the two largest economies in the world and disperse some of the uncertainty that has influenced the economic markets. However, some people are currently expecting progress.
Both sides have stopped explaining the negotiations, and more information will be released on Monday (12). However, US Treasury Secretary Scott Besant and Commerce spokesman Jamison Greer said on Sunday that he had entered into an agreement with China to reduce the US trade deficit.
The Chinese Deputy Hee Lifteng, who met his US replica in Geneva, described this meeting as “Franco” and an important first step.
“It shows that it shows that it shows that it is a step in the right direction and both parties are interested in approaching a structural resolution and developing a better business relationship,” said Eric Kubi, North Star Investment Management Corporation in Chicago.
“The details are still very empty, but I think it is more cooperative than the direction fight, and we have to look at it positively,” he said.
US President Donald Trump has been able to recognize one of the biggest consequences since the launch of comprehensive tariffs on April 2, which has caused confusion in the global commercial scenario and creating serious volatility in the markets.
“I am happy to have made significant progress between the United States and China in the most important trade talks,” Besant reported to reporters.
Trump said on Saturday, after the first day negotiations, the two countries said that “the entire re -art start … friendly but structured mode”.
He said that “great progress” has taken place, but without telling it in detail.
Investors have recently shown optimism that the garbage trade scenes have not materialized, pointing out signs of discouragement between the US and China to restore actions.
“Markets can be promoted by some agreement on a possible agreement, but it depends on the additional details of this reveal,” said TD Securities US Rate Strategy Head Genadi Goldberg.
“The recent price action represents some optimism around the commercial agreement. If this is confirmed, prices are justified. The accident is less significant than the expected. In this case, the market may be disappointed,” he said.
In fact, despite Trump’s comments before negotiations to reduce Chinese tariffs, the commercial agreement announced on Thursday between the US and the UK said that many market participants do not expect big progress in the negotiations.
“We are still skeptical that direct talks between the US and China will lead to big commitment,” said a note to the Global FX Strategist and Macquarie Rates, a note to customers.
The immediate agreement is impossible
Both the US and China need to enter into an agreement, or said Likian Ren, the modern alpha director of Wizdamtree Asset Management. However, in this early stage, it seems less encouraging to do this quickly.
“Everyone wants to see how to deal with contradictory winds yet,” Ren said.
“Currently, the market is probably a little optimistic about what China and the US can reach and the speed of events happen,” he said.
Trade tensions between the two countries have increased last month, increasing US tariffs to 145%on all Chinese imports, and China increased US imports to 125%.
Trump commented on Friday that the 80% rate on Chinese goods was “correct” -145% of the 145% of tariffs on a certain alternative to tariffs.
The S&P500 indicator has already removed the big risks immediately after the announcement of tariffs on April 2, although companies continue to alert investors about the impact of tariffs and the uncertainty they produce.
The S&P500 is still 8% than its historic February record and more than 4% of the year.
Amidst the confusion of tariffs, the concept of weak consumers has raised concerns about the growth of research and other “weak” data, although most financial data indicates elasticity in the economy.
Turning attention toward market volatility
Unsteady, continues. CBOE Volatility Index (VIX), Measurement of Investor’s Anxiety Options, on Friday-April is less than the recent 52.33 peak, but still a long-lasting average of 17.6.
Ren Wizdodry said that one of the factors that limited this instability so far, the high cost of determining small positions and betting on the future market waterfalls.
“When the market is able to move 10%, it is very expensive to establish these positions,” Ren said. The actions fired on April 9 after Trump stopped very heavy rates for 90 days.
However, the markets are made for more volatility, said BCA’s geographical political strategy chief Matt Gertcon, a gross economic research institution.
The best advice of the company is “to sell it as a discharge” Gertken says.
Mathews Asia Portfolio Manager Andrew Mattak said that any sign of progress in early discussions will be welcomed and China will focus more on its domestic financial issues.
“Talking about any other illustrations, he warned that the two parties would end the situation.”
The hardest agreement to negotiate
Although the relatively fast agreement with the UK, the Chief Global Economic Research Claudio Irigoyen of Bofa Securities has warned that it is difficult to conclude other agreements with China being very complicated.
“I can see business agreements with India, Japan and perhaps in the future,” he said. “China – this is very complex and it will be the last,” somewhat geographical political relationship is associated with trade relations.
Investors are worried that negative scenes have not yet taken into account the property prices and that many are satisfied with the modest signs of market progress.
“We don’t need a little conversation,” said Gertken.
