The upcoming G-20 summit has a lot of apprehensions to unfold throughout the course of the meetings. But even before the summit that is scheduled to begin on Thursday, the dollar remained stable and equity markets gained prior to the much-anticipated meeting between Xi Jinping, the Chinese President, and Donald Trump, the U.S President.
What Does The US-China Truce Entail?
Sources have cited that the two largest economies of the world have agreed upon an armistice to stop the ongoing trade spat between the two nations before the summit. The impending fears of Donald Trump raising the tariffs on China and putting new ones have died down which led to the investors showing their interest in risky assets. The optimistic part of the whole deal is that Beijing plans to present Washington with a set of terms that it needed to fulfil before settling the ongoing dispute.
What Do Strategists Around The World Have To Say?
Chief global market strategists around the world although believe that the current state of administration in the U.S, reaching any sort of conclusion with China seems a tough nut to crack. In fact, strategists believe that there are no reasons compelling enough that will make China allow concessional rates to the U.S. The head of the U.S rates strategists believe that although there were hints of initial optimism, the meeting in Osaka between China and U.S is going to be tense.
Effect Of Trade Truce On Major World Currencies:
The dollar index is a measure which is used to track the major currencies such as sterling, Japanese yen and euro including three more currencies against the dollar. The dollar index traded less than ninety-six points which were a slight change against the yen and the euro. The stocks across the world gained a little less than 0.5 percent while stocks across Europe closed at break-even. The stocks gained in markets across the U.S.
The health care stocks rose by a little less than one percent and financial stocks gained 0.78 percent. The high trading trends were observed in the case of the semiconductor companies which have quite an exposure to China in terms of revenue. The debts of U.S Treasury fell in the anticipation of the trade talks between China and the U.S being a little more complicated in contrast to the expectations. The yield fell down by two percent with the rise in the price of the Treasury note.
Effect On Products Around The World:
The bond yields of the German Government fell towards a low that was recorded the lowest till date leading to inflation in the biggest economy in the Eurozone. The bold yield of Germany went down as low as 0.32 percent. Although there are perceptions of proposed sanctions and curbs by organisations, oil prices changed a little which was due to the concerns over the outcomes of the G-20 summit. The gold futures in the U.S went down 0.2 percent lower and settled at around 1400 dollars per ounce, while crude oils increased by five cents to settle at a price of around sixty dollars.