But so far markets are shrugging off the idea and any pessimism on trade
- China official PMIs for November beat estimates and higher than in October
- China Caixin November manufacturing PMI 51.8 vs 51.5 expected
As we begin the final month of 2019, markets are looking to shift towards the theme of a possible recovery in the global economy - with the hope that the rebound next year may lead to a more synchronised recovery in global growth.
There have been green shoots of that over the past few weeks but I reckon it may still be a bit premature to jump to that conclusion. The dark clouds may be dispersing a little but there are still plenty of challenges to be faced by the global economy in 2020.
And US-China trade talks will remain as one of those challenges.
Markets may be choosing to close one eye on the more pessimistic trade headlines since the weekend in favour of focusing on the more upbeat Chinese PMI data (⬆️).
However, that optimism could prove to be misplaced if China decides to use any signs of economic stability as a reason to wait out the trade war with the US even longer.
In essence, if the Chinese economy finds more steady footing, it could put less pressure on Beijing to try and compromise or even push towards any deal - even in the short-term.
And if you think about it, if there is a bit of a mild recovery on the horizon for the global economy - including the US - it could also see Trump less inclined to back down as long as the stock market can feed off the optimism of synchronised global growth again.
