- Risk-off markets will likely to be the theme for the start of the week as weekend news comes in starkly in contrast to Friday's U.S. sessions trade optimistic close and price action where the DJIA managed to rally 500 points before the day was out, recovering from the start of the day's sell-off.
There had been some optimistic wires flowing through from the top negotiating officials on Friday from the likes of Trump and China's vice premier Liu He both using the same language, that trade talks had been "constructive" and there were grounds for "cautious optimism".
However, over the weekend, we have a Global Times report entitled, China will never concede on `issues of principle' - Global Times. China's vice premier Liu He is reported to have said that China is planning how to retaliate. According to the Chief editor at the Global Times, Hu Xijin, reporting on Twitter, Liu He has listed three concerns that must be addressed before talks can move forward.
- The complete removal of all trade-war related tariffs,
- Set targets for Chinese purchases of goods in line with real demand and
- Ensure that the text of the deal is “balanced” to ensure the “dignity” of both nations.
On the other side of the trade war negotiating table, following the weekend's earlier tweets:
- I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the USA for $500 Billion a year.
- The only problem is that they know I am going to win (best economy & employment numbers in U.S. history, & much more), and the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!,
Trump has been making recent comments on trade as follows:
As a consequence, AUD is down - 0.06% at 0.6996, yen +0.14% vs the greenback at 109.79.
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