US, China move closer to trade deal despite heated rhetoric - report

Author: Justin Low | Category: News

Bloomberg reports, citing people familiar with talks

The report says that US and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a "Phase One" deal despite tensions persisting over Hong Kong and Xinjiang as seen earlier today.

Adding that Trump's downplaying of a deal yesterday should not be understood to mean that talks are stalling as he was "speaking off the cuff". Further noting that the tensions stirred up by the Hong Kong and Xinjiang bills are unlikely to impact the talks.

In terms of a timeline, the sources cited said that the US expects a deal to be completed before the 15 December tariffs are to be enacted with outstanding issues at present being how to guarantee agricultural purchases by China and exactly which tariffs the US roll back.

Risk assets have risen sharply on the report here with USD/JPY climbing to a high of 108.76 alongside higher equities and bond yields. However, I'm still rather skeptical to be honest.

Essentially, the same issues (i.e. agricultural purchases, tariffs) remain and I would much rather see official commentary before jumping the gun here. Close but no cigar. That's the phrase that comes to mind if you ask me.

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