Without actually making much progress towards resolution, the Sino-US trade war debacle was able to eek out a sliver of positivity for indices clamouring for a shred of good news.
With its high position on president Trump’s order paper looking under threat – with domestic political engagements vying for his attention – any substantive movement on trade war amelioration looks a long way off.
Nothing too new there. As markets opened on Tuesday morning, they contented themselves with Trump’s consolation prize: a delay on the Huawei ban, which at the very least acts as a symbol of good will.
Speaking on the comparatively improved sentiment of markets, Spreadex Financial Analyst Connor Campbell commented,
“Despite emergent doubts surrounding ‘phase one’ of the US-China trade deal, the European markets managed to climb higher after the bell.”
“Even though Saturday morning’s phone call was described as ‘constructive’, CNBC claimed on Monday that the mood in Beijing is ‘pessimistic’ according to a government source, with the shift coming after Trump denied he would be rolling back tariffs. And with the ongoing impeachment hearings, and then the election next year, the talks could be significantly dragged out as China stall for a potentially better agreement. Oh, and remember, there’s also the small issue of the fresh tariffs on Chinese goods scheduled for mid-December.”
“The blow of this report was eased, however, by the US government delaying its Huawei (SHE: 002502) ban by another 3 month, a move that, if the European open is anything to go by, has been read as a sign that things are at least still cordial between the two superpowers.”
“Lifted by that move, the FTSE added half a percent, an increase echoed by the DAX; the CAC, meanwhile, wasn’t too far behind with a 0.4% rise. As for the Dow Jones, the US index is looking to strike 28100 for the first time later today, the futures pointing to a 65 point increase.”
Despite deflating updates from the UK house market and Volkswagen (ETR: VOW3) on Monday, the session opened brightly for Europe following the uplifting post-close announcement from Airbus SE (EPA: AIR).
“Following Monday’s Tory-supporting, polls-driven gains, sterling held steady ahead of this evening’s first head-to-head between Boris Johnson and Jeremy Corbyn on ITV (LON: ITV). Cable is sitting unchanged at a one-month(ish) high of $1.2957, while against the euro a 0.1% rise sent the pound to a 6 and a half month high of €1.1713.”