It happened on Friday
Donald Trump suddenly got cosy with China. A series of headlines came across Reuters which I reported around 1730GMT. See here. He said the following:
US wants to make a deal on trade, but it is not acceptable yet US may not have ti impose further tariffs on China US will hopefully make a deal on trade, but it is not acceptable yet Trump says China's trade list is pretty complete China'e list of trade proposals is pretty complete
The reaction was that USD/JPY was instantly bid, as you can see from the chart below.
However, the reaction was muted when CNBC tweeted the following below:
Perhaps what was most interesting was the impact on China ETF which was greater than the S&P500 as pointed out by Andrew Cinko via Bloomberg. He said that:
That may be obvious given all the talk about how China has been far more deeply affected by tariffs than the US. All the same, it's nice to see the theory play out in real-time.
It's definitely worth remembering that impact that Trump's tweet had. When and if the deal is done we can expect a sustained relief rally in China ETF.. See below for the comparison between the China ETF and the S&P 500
