17 May 2019 : Investor sentiment has swung back and forth this week due to the persistent uncertainty and ever-changing jigsaw puzzle that is being mapped out around global trade developments.
Stock markets were mostly mixed on Thursday amid the contrasting signals that are being delivered to investors in regards to US-China trade tensions. While there is hope on one side of the table that there will be a handshake between the US and Chinese authorities at the G20 next month to smoothen the recent escalation, this is being met with news that the US government will ban Huawei's access to the US markets over national security concerns.
The conflicting signals over trade are likely to simply spark more uncertainty and confusion in the market, and investors will continue to scatter and reassess their appetite towards taking on risk as a result.
Market sentiment is poised to remain fragile over the next month in the lead-up to the meeting between Presidents Trump and Xi Jinping at the G20 summit late June. Will the world’s two largest economies ever find a middle ground on trade or a tension destined to intensify further throughout the year? This is a question nobody has the answer for. And this is why investors are nervous, especially following the spectacular swerve that has occurred over the past two weeks.
Whatever the outcome of the hotly anticipated Xi-Trump meeting, it will certainly have a lasting impact on market sentiment for the second half of the year.
Source: Lukman Otunuga, FXTM Research Analyst
Reporting for EasyKobo on Friday , 17 May 2019 in Lagos, Nigeria