Trade Negotiations Resume Face-To-Face
Trade negotiators from China and the US have resumed face-to-face talks as a Chinese delegation make preparations to visit the US farming belt next week. On Thursday, Deputy US trade representative, Jerry Gerrish, and Chinese officials met and are expected to follow up again today in order to set the stage for next week’s visit, as well as top-level talks which are expected to take place in October. This has bolstered sentiment surrounding the trade war. However, there remains a lot to do as the complex nature of a trade agreement suggests the trade war will not be settled anytime soon.
Meanwhile, data reports out yesterday, overall, were fairly positive for the US, with numbers affirming the Fed’s view that the economy remains relatively healthy at the moment. There are, however, still signs of some cracks forming which should keep the Fed and the market on edge in the coming months.
In other related news, the OECD revised lower its economic growth estimate for the global economy, a result of weakening growth in the US, China, and the UK. The institute cited the ongoing trade war as well as Brexit as key factors for the global slowdown, which is likely to see growth come in at its lowest since the 2008 crisis. The US is now expected to grow at 2.4% this year and 2.0% next year, while China is expected to grow by 6.1% and 5.7% in 2019 and 2020 respectively. Given these headwinds and the fact that the global business cycle is maturing, we can expect global central banks to continue turning dovish to keep economies on track. Good luck!
