Markets are still keeping hope of more positive trade developments
- China continues to insist tariffs be rolled back as part of Phase One trade deal
- Optimism about phase one China deal 'premature, if not misplaced' - report
That is despite the more cautious and pessimistic reports since the weekend (⬆️). The mood in markets at the moment is more positive with risk trades instead focusing on the better-than-expected Chinese PMI data.
There are still some hints of uncertainty with regards to the whole HK bill situation as some news sources are hinting at that being a new sticking point in negotiations - adding to agricultural purchases and the tariffs rollback.
A deal before the end of the year may not be likely but so far there are no suggestions of an imminent and colossal breakdown in talks either.
As things continue to sit in limbo, the first key date to watch out for will be 15 December. The US is set to levy a new set of tariffs against China on the date but there is heavy expectations and an understanding that those tariffs won't be implemented.
However, that is in part the problem as the US is only willing to offer an exemption to the 15 December tariffs and aren't looking to rollback previous tariffs - something that China has been requesting for over the past few weeks.
As such, I reckon we could be sitting on this "will they, won't they?" kind of situation for quite some time yet and possibly up until the early stages of 2020. As long as things aren't getting worse, I think both sides can take some heart in that.
