US and China have landed a 'phase one' deal – Danske Bank
|Danske Bank analysts note that stocks and other risk assets rallied this morning on news that the US and China have landed a 'phase one' deal.
Key Quotes
“US sources close to the negotiations reported that the tariff hike planned for Sunday is off the table and that the US has offered to cut existing tariff rates by up to 50% in exchange for Chinese agricultural purchases in the order of USD50bn and increased protection of intellectual property rights.”
“We expect some official announcements from both China and the US soon to confirm this deal. If confirmed, we believe this is good news as it means the two sides can move on to phase two. We still see a 50-50 probability a phase-two deal can be reached next year.”
“Asian markets jumped overnight, with Japan's Nikkei 225 gaining more than 2.5%, and US index futures suggest the equities rally will continue today. Treasuries extended a tumble, with 10Y yields down to 1.91%.”
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