Although we were hoping for a more favourable statement from the US-China trade talks which ended yesterday, it appears that at least on the surface that US-China trade discussion remains a work in progress.
But this outcome if very much in line with broader expectations given this was a preliminary mid-level US and Chinese trade representatives affair possibly setting up for a more significant announcement in Davos when President Trump takes the grand stage.
Let’s face if you asked me on Monday if I expected a significant outcome from this meeting with Trump not holding court, I would have said absolutely not, but unquestionably markets were looking for something more concrete to sink their teeth into despite the statement chock-full of positives, but lacking in the necessary specificity.
China Data Miss
Perhaps markets got a little bit ahead of themselves, but with both the Fed and the Pboc providing a decent backstop for risk, I would expect the market to fade the China Data miss move once fast money traders have run their course.
Risk sentiment went into the tank after China’s big miss on CPI and PPI. USD/CNH is back above 6.8176 level, USD/JPY is approaching 108. AUD/USD at near 0.7150.