US/ Sino trade negotiations start again, clashing with the Fed interest rate decision
|- US team of negotiators confirmed to travel to meet with Vice-Premier Liu He and China's negotiation team.
- The events will take place at month-end and around the Federal Open Market Committee two day meeting.
Earlier suspicion hat a U.S. delegation led by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin would be travelling to China next week for the first face-to-face meetings since the Group of 20 have been confirmed in recent trade.
Robert Lighthizer and Treasury Secretary Steven Mnuchin will indeed travel to Beijing to hold talks between Monday and Wednesday. Markets will likely be awash with relative trade headlines in the lead-up to the main showdown which will be the Federal Open Market Committee commencing the 30th with the Federal Reserve's interest rate decision revealed on Wednesday, 31st.
FX implications
The clash between the two events will certainly make for an interesting FX market. On the one hand, an in-person meeting between Lighthizer, Mnuchin and Vice-Premier Liu He would be seen as a positive step towards reducing trade tensions and be regarded as risk positive, so long as subsequent headlines are indeed positive, while on the other hand, liquidity aught to be thinning out in the lead into month-end and the Fed's interest rate decision. Positive sentiment is likely to support the Dollar, AUD and EM-FX although investors will likely await the outcome of the Fed before positioning accordingly, making for a busy end of the month followed by closing sessions next week.
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