Union Bank of Switzerland’s analysis team suggests that the markets already seems to have prices in the US-China trade deal and their base case, to which they assign a 60% probability, is that a trade agreement will be signed in the next 2 to 3 months.
“We think any deal would include a commitment to reduce bilateral trade imbalances, and a review of intellectual property protection and forced technology transfer. But this positive outcome appears to be well priced in.”
“Chinese stocks, which are highly sensitive to the result of the talks, have been the best performing market of the year, with the Shanghai Composite up 22%, roughly twice the rise in global stocks. And US industrials, a sector which is also sensitive to trade conditions, have outperformed the S&P 500 by nearly 2% points this year.”
“Also, regardless of whether an agreement is reached, the deep-seated, longer-term nature of US–China rivalry is likely to continue to be a source of periodic volatility, and should temper any market enthusiasm in the event of a trade deal.”
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.