Risk sentiment was buoyed once again this week by news of continued developments in the ongoing US/China trade negotiations. Top officials from both countries held phone meetings this week to map out the next steps in the talks.
Chinese state news reported that US Trade Representative Robert Lightizer and US Treasury Secretary Steve Mnuchin held calls with Liu He, China’s top economic minister. The calls took place to discuss “key issues” on trade and the “next steps” in the negotiations.
Market Awaiting Word on Trump/Xi Meeting
The phone meetings come after Trump suspended his originally planned March 1st trade tariff increase in light of the progress being made in talks.
Tariffs on around $200 billion of Chinese goods were due to increase from 10% to 25%. However, Trump has now put the increase on hold to allow for further discussions. These discussions are thought to include a potential meeting between Trump and Xi-Jinping. But for now, no date has been scheduled.
Commenting on reports of a meeting, which might even take place at Trump’s own Mar-a-Lago property in Florida, Press Secretary Sarah Sanders told reporters:
“In terms of whether or not we have a date set, not yet. We’re continuing negotiations with China… When we have an announcement for the two leaders to sit down, we’ll let you know.”
Despite the lack of details, the market remains optimistic. For now, it’s happy merely with signs that the two countries are continuing to work together. With the trade war of the last year and a half having taken a heavy toll on world trade, any news that the two sides have agreed will be welcomed globally.
USD continues to threaten an upside break as it once again puts pressure on the 97.68 level within the bullish channel which is still framing price action. Above here, the next level to watch will be the 99.18 level. There, we have confluence between structural resistance at prior swing lows and the channel top.