Market Toyed By Trade Sentiment

This week had been a hectic week for markets that rely on trade sentiment. Safe-haven were the main losers, dollar obtaining significant rebound after last week losses, while oil holding tight on its higher grounds. 

Earlier this week, both the US and China commented on reaching consensus regarding previous unresolved trade issues through a phone call. Following that bullish remark was US President Donald Trump’s consideration of lifting earlier tariffs on Chinese goods to smooth further trade negotiations. From China’s side, Premier Xi Jinping said that he would personally travel to the US to sign the phase one trade deal. 

On Thursday, gold plunged to its 6-week low near $1,460 after both sides reported to have reached an agreement to roll-back tariffs on each other goods simultaneously starting from the first phase while continuing with further phases. According to China’s Commerce Ministry, the condition of the agreement was that both sides are required to remove the same proportion of tariffs. Besides that, the White House spokesperson also signaled that the Trump administration is very optimistic that both sides can reach a deal soon.

Despite all bullish news on the possible signing of the phase one trade deal this month, the market’s skepticism remains, with officials from the Trump administration previously voicing their concerns that the agreement will most probably be delayed until December. Furthermore, both sides are still unable to confirm a venue and date to sign the deal. 

Exciting weeks ahead, with the 16-month trade war, finally being settled phase by phase as market participants wait for further confirmation before making rash investing decisions.

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