Traders will be hoping for some positive headlines this week around the ongoing US/China trade talks, following the disappointing announcement last week that Trump will not be meeting with Chinese premier Xi Jinping ahead of the March 1st deadline.
US Officials To Travel To Beijing
US and Chinese officials are scheduled to meet for a further round of talks this week, with two days of meetings beginning on Thursday.
The US delegation, led by US Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin, will travel to Beijing for high stakes talks as the deadline looms large on the horizon.
If the talks fail to produce a result by March 1st, Trump has warned that he is ready to increase tariffs from 10% to 25%, on around $200 billion worth of Chinese goods. He has stated that he could even apply tariffs to the remaining $267 billion of Chinese goods coming into the US.
Trump Won’t Meet Chinese Premier Ahead of Trade Talks Deadline
Risk sentiment took a hit last week as newswires announced that Trump will not be meeting the Chinese premier ahead of the March 1st deadline, as had been expected. The news was taken as a sign that talks are not progressing well.
This is a view encouraged by comments from White House advisor Larry Kudlow who told reporters that a “pretty sizable distance” remains between the two sides in the negotiations.
With the deadline fast approaching, this next round of talks will be closely monitored. Any reports of obstacles and difficulties remaining will likely cause a further sharp unwinding of risk assets, whereas signs of progress will keep risk sentiment buoyant.
The pullback last week in the Nasdaq found support at the retest of a prior swing high, keeping the recent bullish phase intact. Bulls will now be looking for price to move past next week’s high and challenge the next key resistance level between 7136 – 7215.7.