US-CHINA: Deal still far away

Daily Analysis - 03/07/2019

Peter Navarro said is a very complicated process and we need time


US-China fresh trade discussions raised confidence, but a possible agreement is yet far away according to Peter Navarro, White House trade advisor.

Discussions between the two economic giants regarding matters including alleged intellectual property theft and trade debts failed in May. However, United States President Donald Trump and Chinese President Xi Jinping recognized the need to continue the discussions and pause any new taxes. The discussions restart agreement took place at the Group of 20 summits in Osaka, Japan, over the last weekend. On Tuesday morning Navarro said on CNBC “This is a very complicated process,” and added “We had a deal that was over 150 pages long with seven different chapters” at the time the negotiations flamed out, which is “the basis now for moving further forward”.

The greenback is losing momentum

On Wednesday the high demand dollar fought to keep its price levels while decreasing optimism for any short-term US-China trade agreement renewed safe-haven interest and sent US bond yields to their weakest levels after 3 years. The dollar index versus a box of six main rival currencies was a tone below at 96.696 following a retracement from 96.874 reached yesterday. The greenback dropped about 0.3% to 107.579 yen and moving away from a 12-day top of 108.534 reached this week.


Oil prices steady for now

On Wednesday Oil advanced following a sharp drop in the previous trading session. The support came after the extended production reductions by OPEC and its allies notwithstanding fears that a slowing global economy could kill demand.

Brent crude futures for September shipment went up 36 cents, at $62.76 a barrel while U.S. crude futures for August rose 29 cents, at $56.53 a barrel.


Stocks got a weak momentum

On Tuesday U.S Stocks increased lightly but profits were limited following the U.S. warning of a new round of taxes on European goods. That decision from Trump's administration pressed down the recent enthusiasm regarding the US-China trade peace. The Nasdaq Composite improved about 0.2% to 8,109.10.

The S&P 500 rose 0.3% to 2,973.00 and registered a record high. The popular Dow Jones Industrial Average went up more than 69 points at 26,786.67.


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