Ahead of Sunday when additional tariffs on Chinese goods are due to kick in, financial analysts have said a trade deal between the U.S and China may be announced which will boost financial markets. The tariffs which include 15% on about $160 billion in Chinese exports to the U.S is set to commence on Sunday.
The U.S President Donald Trump had announced in October that the initial deal would be completed before the end of the year and would address intellectual property and financial services concerns as well as purchases of about $40 billion to $50 billion worth of agricultural products by China.
However, some financial analysts anticipate a deal being announced by both countries ahead of Sunday. Senior market strategist at Slatestone Wealth, Kenny Polcari says an announcement will be made on Saturday night about a deal being reached he said on Wednesday.
According to Eric Robertson, Global head of foreign exchange, rates and credit research at Standard Chartered Bank, Markets are already anticipating that some form of an initial deal will be signed.
He said even if there’s no deal by Sunday, both parties would probably indicate they’re in a holding state in terms of the trade deal.
In a note on Wednesday, analysts from DBS said that negotiators from both countries have moved away from a deadline for a Phase 1 trade deal.
That US remains unwilling to meet China’s term to roll back existing tariffs in exchange for its purchases of US agricultural products. The final decision to delay tariffs they wrote rests with US President Donald Trump.
DBS said that delaying both trade talks and tariffs would keep the Chinese yuan stable — at between 7 and 7.10 against the dollar, DBS said.
The yuan first sank past 7 to the dollar in more than a decade in August amid an escalation in the trade war.