Markets tiring of US China trade optimism? – Westpac

Robert Rennie, Head of Financial Market Strategy at Westpac, offered his take on the recent mixed messages over the prospects of a preliminary US-China trade deal.

Key Quotes:

“Back on the 11th October, US President Trump and China’s Vice Premier Liu He reached a truce in their trade war, after agreeing a limited deal which saw the US hold off on tariff increases that were due the following week in exchange for Chinese concessions on agricultural purchases.”
 
“The deal was expected to be signed within 5 weeks and global equity markets rose strongly through October and November on expectations for a pickup in global growth.”
 
“Six weeks have passed since the ‘phase-one’ deal was agreed in principle with no deal in place. Indeed only a week ago White House advisor Larry Kudlow claimed the two sides were down to “short strokes”, implying a deal was indeed close.”
 
“Markets are showing some signs of tiring of the steady drip feed of upbeat comments from US officials and no signs of a final agreement looking likely.”