Swissquote Bank Research Team
Swissquote Bank Ltd
Trade talks resumed on Monday and appear to be on a good track. Mid-level officials have opened discussions while high-ranked officials should take the lead on Thursday and Friday, including US Trade Representative Robert Lighthizer, US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He. We suspect progress could trigger a Trump–Xi meeting by mid-March with US tariffs being postponed. USD/CNY is currently trading at 6.7798, approaching 6.7745 short-term.
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Consumption in China is at its lowest in 15 years and trade data shows clear signs of weakness. January imports fell 10%, the biggest drop since July 2016. China’s economy could be slowing more sharply than initially thought, although Lunar New Year holidays probably hit January and February activity. The Sino-American trade conflict might be weakening manufacturing and trade figures, but the drop in domestic demand plays a bigger role, forcing authorities to boost domestic demand by reducing import tariffs and providing liquidity stimulus.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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