Barclays on the Trump-Xi meeting
This Friday, Trump and Xi meet on the sidelines of the G20 in Argentina and markets will be looking for some signs of progress or hope.
They say a good outcome would be a ceasefire or an outline of an agreement. They say that would provide a reprieve for risk assets.
A bad outcome would be no progress on trade talks and/or a further souring of the relationship. In that scenario, they see the Korean won at risk.
Even if they news is good, they say it won't last and that the US dollar will continue to rally especially against Asian currencies.
"Beyond the G20 summit, however, we expect the US-China relationship to remain difficult, and trade tensions to intensify next year. On the USD, we think markets have overreacted to recent Fed caution and believe that the foundations for further Fed rate hikes remain solid," they write in a note.