(16 NOVEMBER 2018)DAILY MARKET BRIEF 2:US-China short-term breakthrough unlikely

There is a high likelihood that the meeting of US President Donald Trump and Chinese President Xi Jinping later this month won’t be game changing. The best-case would be that both leaders confirm their intent to maintain talks. The US’s latest request to China concerns 142 different items, with questions ranging from trade surplus to China mainland market opening, so this will require time from both sides. The request also raises the prospect of the US implementing further duties, currently valued at 10% of USD 200 billion and expected to reach 25% by the end of the year. Although the Chinese government is showing willingness negotiate, it appears less likely that a resolution will be met promptly. Accordingly, we expect the Chinese yuan to remain highly influenced by media announcements in the coming weeks leading to the Trump-Xi meeting.