Danske Bank analysts note that overnight, the US President Donal Trump announced that the scheduled 5pp rise in tariffs on USD250bn worth of Chinese imports on 1 October will be postponed by two weeks.
“The decision comes after last week's announcement that the two parties will meet in the beginning of October and on the request of Chinese Vice Premier Lie He, as the 1 October marks the 70 th anniversary of the People's Republic of China.”
“The news also comes after China yesterday announced a broad list of US goods suspended from tariffs. The announcement eased trade war escalation fears with broad equities, yields and the CNY moving higher, while safe havens in CHF, JPY and gold weakened further early this session. Importantly, while we remain sceptical of an eventual trade deal being reached already in October, this morning's announcement could drive an extension of the more upbeat market environment seen since last Wednesday, which stands in stark contrast to most sessions during August when trade and recession fears dominated.”
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