Investors seem to have enough arguments to support risk appetite. The long-awaited ECB meeting along with fresh headlines from both
the US and China are boosting equities which are set for another weekly gain. The recent decision made by US President Donald Trump to delay
tariffs of 30% on $250 billion worth of Chinese products from 1 October to 15 October 2019 due to People’s Republic of China 70th anniversary
as well as China’s tariff waivers come as comforting announcements on the marketplace. Yet hopes of a breakthrough in existing trade
conflict is subdued, as negotiations planned for early October are likely to distance from fundamental discords surrounding
intellectual property, technology transfer and a thorough enforcement mechanism.
The two largest economies are set for a new round of talks officially taking place in mid-September with deputy trade negotiators while
minister-level talks involving Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven
Mnuchin should occur in early October. Topics including US agricultural product imports, sales ban on China’s tech firms and tariffs delay
are likely to be discussed, although no major progressions should be considered. Furthermore, the recent decision made by Chinese
counterparts to exempt a batch of 16 products out of 8000 imposed items, including animal food, cancer drugs and chemicals remains limited
considering that the focus of trade negotiations mainly concern soybeans and related agricultural goods. We would therefore remain
cautious ahead of upcoming discussions starting next month.
USD/CNY declined -1.15% from previous 7.1789 (03/09/2019 high), trading at 7.0893 (-0.38% week-to-date) as the People’s Bank of China
fixing is set at 7.
08.By Vincent Mivelaz
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