G20: Market relief, eyes now on Central Bank's execution

Wednesday 03 July 2019

Research / Market

G20: Market relief, eyes now on Central Bank's execution 

The worst case scenario of further trade escalation has been averted. The G20 meeting over the weekend resumed the negotiations between China and US on trade, after the tariffs increase in May on $200bn of Chinese products, and the consequent Chinese retaliation,which both put financial markets under pressure and increased downside risk to the economic outlook. The worst case scenario of an extension of tariffs on the remaining approximately $300bln of imports from China, which would have seriously damaged the global economy, has been averted in the short term. Some concessions have been made on both sides: from the US to ease the Huawei ban (US companies will be again allowed to sell their equipment to the Chinese company), and from China to step up the import of US agricultural goods. 

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