Anticipation over Trump-Xi meeting keeps markets on tenterhooks   

28 June 2019 : Asian stocks slipped as the G20 summit kicked off in Japan, bringing investors closer to the pivotal Trump-Xi meeting which should set the tone for US-China relations moving forward. The Dollar Index (DXY) remains steady, while the Japanese Yen and Gold are gaining at the time of writing, as markets continue playing it safe ahead of what could be a watershed event for global markets.

This weekend, markets will find out whether their hopes for a restoration in US-China trade talks will become reality, and whether the scope for further deterioration in bilateral relations would be significantly constrained. It remains to be seen whether the public displays of chest-thumping from both sides since May will eventually lead to handshakes and smiles on Saturday. Such a reconciliatory image out of the Trump-Xi meeting is expected to send relief signals coursing through the veins of the markets, potentially boosting global equities and emerging-market assets.

Still, the prudent investor would be well aware that the road ahead isn’t all plain sailing, given the tremendous gulf that still remains between both governments, with tit-for-tat tariffs still in place. As long as the prospects of more trade tariffs loom large over the horizon, risk aversion should continue having a major say on market sentiment.

Reporting for EasyKobo on Friday , 28 June 2019 in Lagos, Nigeria

Source: Han Tan, FXTM Market Analyst 

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