Massive market volatility was sparked overnight after comments from the White House advisor Peter Navarro, he initially indicated to the press that the U.S.-China trade deal was “over.”
A huge wave of buying pressure came into play with the safe-have FX on this; USD and JPY, with the stocks and riskier FX; AUD, NZD being hit largely on this, everything other than USD.
However, then not long after the markets spiralled into panic mode, comments from Navarro backtracking on what he said saying they had been taken “wildly out of context”. The likes of Kudlow and also Trump further confirmed that the pact still stands.
Trump had tweeted:
“The China Trade Deal is fully intact. Hopefully they will start to live up to the terms of the ‘Agreement.’”
U.S.-China relations have reached their lowest point in years since the coronavirus pandemic that began in China hit the United States hard. Further worsening following China’s move to implement security legislation in Hong Kong.
Trump and his administration have repeatedly accused China of not being transparent about the outbreak.
As a reminder, last Thursday, Trump on Thursday renewed his threat to cut ties with China, following talks between officials on both sides.
What does this mean for the markets?
It has been shrugged off for the time being, however if there are continued signs of tension and China does not obligate on the Phase 1 trade deal, that it pledged to boost purchases of U.S. goods by $200 billion over two years, then things will drastically change in terms of tone.
WANT TO BECOME AN ALL-ROUND TRADER?!
Fundamentals are not easy to master, which is why we wanted to make them greatly understandable for the everyday person.
Our fundamental course, helps anyone understand them, all curriculum is very much fun, informative and packed with much energy. It will help you transition into an all-round trader, implementing fundamental and technicals to provide the edge when trading.
Click here to get started today!
We cover fundamental and technical analysis every single day for our members. Click here to view our membership packages.