China said to be unwilling to budge on big structural changes
The Bloomberg report says that China is casting doubts about reaching a comprehensive long-term trade deal with the US, blaming Trump's impulsive nature and the risk that he may back out of even the limited deal that both sides are about to sign in the coming weeks.
Adding that Chinese officials have warned that they won't budge on structural issues either, citing people familiar with the matter. Further noting that China is demanding an end to tariffs in order to begin any talks for "Phase Two".
Risk trades are taking a bit of a hit with USD/JPY quickly down to a low of 108.35 as equities and bond yields fall as the headlines hit.
This doesn't mean that a "Phase One" deal is off but it certainly highlights that what both sides are working towards in November is essentially pointless in the grand scheme of things. The trade war is merely put on ice, it doesn't mean it is over.
And as mentioned before, China has loosely made vague promises on its currency and IP protection during the "Phase One" talks. I don't think it is any surprise that they are not looking to make firm commitments on those matters and that is what we are seeing.
Let's see if we will get any official word on this matter in the sessions ahead or if US and Chinese officials will rebuke the report above.
