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Keep An Eye on China-US Relations for the Sentiment

China and the US were locked in a trade war in the last two years, with hundreds of billions worth of tariffs both ways. But, by the last quarter or 2019 they reached an agreement and signed the Phase One deal, which improved the sentiment in financial markets. Although, with the outbreak of the coronavirus the situation has deteriorated again.

China went into the offensive, taking over Hong Kong and planning to take over Taiwan, which increased tensions between the two countries, while earlier today it expelled US officials from the Chengdu consulate, making some comments as well. This has hurt the sentiment a little and if the situation escalates with US expelling Chinese diplomats, then the sentiment will turn negative, as tensions escalate. This should also keep commodity dollars subdued Below are the comments form Chinese officials.

Comments by the Chinese foreign ministry

  • US’ Chengdu consulate diplomats must leave China in 30 days
  • US must close Chengdu consulate within 72 hours
  • US is totally responsible for current bilateral situation
ICYMI, China had ordered the US to close its Chengdu consulate earlier in the day. The ongoing tensions between the two are one of the reasons keeping risk trades more nervous since overnight trading. US futures are still seen down ~0.6% currently.
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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