Trade continues to be the most important issue affecting the financial markets at the moment. The United States and China both continue to baffle investors with mixed statements about their current trade relationship.
Last week, President Trump gave a speech that pretty much said nothing, stating that a deal with China is still possible, but that he would not sign anything that doesn’t appeal to him.
Now his Chinese counterpart, Xi Jinping also said that China wants a deal and an end to the trade war that the Asian country did not initiate, but only on the condition that Chinese interests are respected. The last statement is likely hinting at a new US bill that demands of China to handle the Hong Kong protests in a certain way. Not used to foreign intervention, China has reacted quite negatively to this bill, which has not been signed into law just yet.
Nevertheless, China officially invited the US trade negotiator team to join them in Beijing for more talks in the coming days, hoping to get more progress on the phase-one agreement done before Thanksgiving (November 28).
The news that China is still very much on board with the negotiations for the phase-one agreement, despite the pro-Hong Kong bill introduced in the United States, today has boosted risk appetite among investors. However, this sentiment might not last long, as is the trend with news about the trade war.
As a result, the dollar and other safety assets are a bit weaker today. The Japanese yen is a notable exception, as it refused to budge from its position and remains ready to react to market pessimism instantly.
