US and China to sign phase one deal

Daily Analysis - 15/01/2020

Phase one will be formalized today


Following many months of dispute that crippled global growth the two greatest world economies – the US and China are set to confirm a long awaited trade arrangement to end their ongoing trade fight. The “phase one” agreement, is to be confirmed today at a White House ceremony that is set to take place at 11.30 am. The deal includes that China needs to purchase an additional $200bn of US products, including agriculture goods, in exchange for a minor reduction in some taxes.

However, this deal is by far not enough to hold a permanent peace to stop a trade conflict that has remained active for almost two years, damaging the confidence in both nations and completely interrupting the normal businesses on both sides.

Trump VS Apple

The United States President Donald Trump in a tweet slapped the famous company Apple over its refusal to unlock the locked iPhones that a shooting suspect used at a Navy base in Pensacola last December. President Trump tweeted “We are helping Apple all of the time on TRADE and so many other issues, and yet they refuse to unlock phones used by killers, drug dealers, and other violent criminal elements. They will have to step up to the plate and help our great Country, NOW! MAKE AMERICA GREAT AGAIN,”

Last Monday, William Barr US Attorney General alleged that Apple had not given “substantive assistance” in opening the two iPhones to gain further information regarding the case.


Investors favor gold

On Wednesday the popular safe haven Gold surged while traders preferred safer assets due to doubt regarding the U.S.-China Phase one trade deal’s effectiveness following a top U.S. executive saying taxes on Chinese goods may stay active despite the confirmation of a deal.

Spot gold climbed 0.3% to $1,551.37 per ounce. Gold dropped to its weakest level since Jan. 3 at $1,535.62 yesterday. U.S. gold futures advanced 0.5% to $1,552.29.


Phase one deal lowers oil demand

On Wednesday Oil moved lower due to fears over what is perceived as a weak Phase 1 trade agreement between the United States and China. U.S. West Texas Intermediate crude futures fell 18 cents, to $58.03 a barrel. Brent crude dropped 19 cents, to $64.29 per barrel.


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