8 Oct 2019: High level trade negotiations will certainly be the major theme this week as Chinese officials head to Washington to resume talks with their US counterparts.

Given the unfavorable global macroeconomic conditions and growing pain manufacturers are feeling from protracted trade disputes, markets are cautiously optimistic for some progress in trade talks. However, any hopes of a major breakthrough deal are being quashed by mixed messages from the United States and China. It was only on Monday, the Trump administration blacklisted 28 Chinese organizations which essentially restricted their ability to do business with American firms. This move by the Trump administration will most likely strain US-China relations and add to the growing list of barriers preventing a major breakthrough anytime soon.

Nevertheless, an interim deal that halts the scheduled tariff hikes on Chinese goods coming into effect on October 15 will be warmly welcomed by investors across the globe. Fresh signs of both sides expressing interest for further discussions should offer some light at the end of the long trade war tunnel.

Asian stocks are flashing green on Tuesday amid trade hopes and this sentiment could lift European stocks later in the day.

Source: FXTM Senior Research Analyst, Lukman Otunuga 

Reporting for EasyKobo on Tuesday , 8 October 2019 in Lagos, Nigeria