David Mann, global chief economist at Standard Chartered, points out that the news flow on the US-China trade war has been erratic, to put it mildly.
“Market panic subsided after the December 2018 G20 meeting, only to resume in May 2019 with a new cycle of punitive measures and counter-measures. There are hopes that the G20 summit on 28-29 June will mark the start of a more constructive phase. While a sudden agreement would be a positive surprise, it would not be the end of the story.”
“The pattern of unpredictable developments is likely here to stay, particularly with the approaching 2020 US presidential elections. More fundamentally, the dispute has gone beyond trade to the contentious areas of security and technology, meaning that broader US-China tensions will not be settled by an agreement on trade.”
“It is in both sides’ interests to settle the economic dispute quickly; this is also crucial for global growth, given that the US-China economic relationship is arguably the most important in the world.”
“Even if a deal is struck, though, the effects of the dispute are already apparent: weaker investor sentiment towards global growth and an acceleration of the diversion of FDI flows to alternative markets to China (especially in ASEAN). This provides further reason to believe that the ‘dovish wave’ among global central banks (discussed in our latest Global Focus quarterly publication) is here to stay.”
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.