Expect temporary market relief from Trump-Xi meet

Expect temporary market relief from Trump-Xi meet

Expect a photograph alternative, a “mock deal,” and temporary market relief from the much-touted assembly between U.S. President Donald Trump and his Chinese counterpart Xi Jinping on the G-20 meeting, an economist stated on Friday.

China analysis at TS Lombard, stated of the assembly in Buenos Aires, Argentina subsequent week.

Zhuang advised CNBC he anticipated a “photo op” and a possible “mock deal” from the assembly between the leaders of the world’s two largest economies, “which means there will be temporary market-positive feedback from that.”

But commerce tensions will proceed to escalate, he added.

China’s financial system can be hit by the commerce warfare, with actual GDP progress getting shaved by zero.5 to zero.7 share factors from the start of 2019, he stated.

Zhuang stated China would not wish to provoke additional escalation in bilateral relations with the U.S., however Beijing may very well let the Chinese yuan weaken ought to the tariff combat proceed.

As for the risk of being labeled a “currency manipulator” ought to the Chinese yuan decline additional, Zhuang stated there seemed to be little draw back dangers from that.

“Everything has already happened i.e. putting in tariffs, negotiations. Trade war was the worse case scenario even before being labeled a currency manipulator,” stated Zhuang.

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