China: What to expect from the G20 summit? – Standard Chartered


Standard Chartered analysts point out that their clients see the G20 summit on 28-29 June as a pivotal event that may determine the intensity of US-China trade tensions and the ensuing policy responses.

Key Quotes

“In the run-up to the summit in Osaka, President Trump continues to exert pressure on China on trade and other issues, while President Xi is preparing the nation for an extended trade war.”

“We are convinced that a meeting between the two leaders is in the making. Trump has expressed a strong desire to meet Xi at the summit. While China has yet to confirm the meeting, we do not think it will waste an opportunity to demonstrate its commitment to averting a trade war that could disrupt global economic growth.”

“Xi and Trump will likely agree on the principles for the resumption of trade talks.”

“We think the market may be too pessimistic about a trade deal within the next two to three months. The two sides appear to have reached an understanding on 90% of the issues after 11 rounds of talks; resolving the remaining issues will require more political will than time. Imposing additional US tariffs on all imports from China, which Trump has threatened in the absence of a deal, would likely take a big toll on the US economy in an election year.”

“If the G20 summit fails to prevent an escalation of the trade war, we expect China’s government to deploy more fiscal stimulus, supplemented by credit expansion and a possible selective easing of property-market policies, to keep GDP growth above 6%. The authorities may also allow more FX flexibility, partly due to shifting fundamentals.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

AUD/USD rises above 50-HMA, bull reversal in the making?

The sell-off in AUD/USD seems to have run out of steam, courtesy easing RBA rate cut expectations after upbeat Australian CPI data. The pair trades above the 50-hour average. A close above 0.6765 would confirm a bullish reversal candlestick pattern on the daily chart. 

AUD/USD News

USD/JPY fills Monday's bearish gap ahead of Fed interest rate

USD/JPY has filled the gap created by Monday's negative open. Coronavirus fears have subsided in the last 24 hours, allowing recovery in USD/JPY. The respite could be short-lived if the Fed sounds dovish, sending the US dollar lower. 

USD/JPY News

Federal interest rate preview: Stable policy and an uncertain future

The course of the American economy has not altered since the previous FOMC meeting on Dec last year. 4Q growth is expected to be 2.1% when the preliminary figures are released by the Bureau of Economic Analysis on Thursday.

Read more

Gold: Bulls looking for a discount in $1560s

Gold top in the making with a weekly shooting star and weekly divergence. The price of gold has been found floundering between 1580 and the 1560s following a surge at the start of the year to the highest levels since March 2013 at $1,611.

Gold News

GBP/USD: Modestly flat above 1.3000, Huawei talks in the spotlight

GBP/USD sellers catch a breath after four consecutive days of declines. The UK’s favor for the Chinese tech giant negatively affects its friendship with the US. Brexit headlines keep calm while BOE readies for the decision.

GBP/USD News

Forex MAJORS

Cryptocurrencies

Signatures