Market mood brightens on China tariff delay   


14 August 2019 : A ‘risk-on’ vibe is sweeping across financial markets after the US Trade administration (USTR) announced that it will remove some items from its target list and delay the 10% tariffs on certain Chinese goods until December.


This unexpected development is stimulating risk appetite while reviving hopes that the two largest economies in the world will eventually find some middle ground on trade. Asian stocks rallied on Wednesday thanks to the improving market mood and this positivity should support European shares.


While this burst of positivity and renewed optimism over China and the United States resuming trade talks in two weeks is good news for global sentiment, investors should remain cautious. It is worth keeping in mind that the US is still moving forward with 10% tariffs on much of the $300 billion in Chinese imports first disclosed in May. Global equity bears can still make an unwelcome return if tensions arise before the scheduled talks in two weeks, especially if geopolitical risks and global growth concerns dent investor confidence.


Source: FXTM Senior Research Analyst, Lukman Otunuga


Reporting for EasyKobo on Wednesday , 14 August 2019 in Lagos, Nigeria


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