Markets Remain Quiet Today, as China is Not Responding to the Trade Deal

Posted Friday, December 13, 2019 by
Skerdian Meta • 1 min read

According To Trump, COVID-19 Has Undermined A "Phase Two" U.S./China Trade Deal.

Yesterday, US President Donald Trump finally went ahead and signed the Phase One deal with China. We had been hearing rumours all week that the deal was going to be signed off on Friday, which helped the sentiment somewhat. We saw a jump in risk assets yesterday after Trump’s tweet, but there is no follow through today.

Wall Street Journal is now also reporting on the lack of confirmation by the Chinese officials. The report notes the more sober mood in Beijing by highlighting that “none of China’s state-owned media outlets or economic agencies involved in the trade negotiations made any public statement on Friday about the deal endorsed by Mr. Trump”.

The report also added that the Chinese foreign ministry spokeswoman today did not even confirm the existence of a deal all the while just mentioning that “any agreement must be mutually beneficial”. China’s official did say just now that they will not force foreign firms to transfer their technology, which is a good sign, but no comments on the trade deal.

If they play tough on this, Trump might pull the deal off altogether, which would reverse things immediately and send risk assets diving, so watch out for comments from both sides in the following hours. On the opposite side, a confirmation from China on the deal, would improve the sentiment further, sending safe havens lower.

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