{"id":152096,"date":"2019-07-24T09:59:47","date_gmt":"2019-07-24T13:59:47","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=152096"},"modified":"2019-07-24T09:00:15","modified_gmt":"2019-07-24T13:00:15","slug":"us-china-to-restart-trade-talks","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/07\/us-china-to-restart-trade-talks\/","title":{"rendered":"US & China To Restart Trade Talks"},"content":{"rendered":"
July 24, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

While attention is mainly directed towards Europe given the keenly anticipated ECB meeting tomorrow, as well as news that\u00a0Boris Johnson is now the new UK Prime Minister<\/a>, the\u00a0US\/China trade story is about swing back<\/a>\u00a0into the spotlight.<\/p>\n

US Delegates Head to China<\/strong><\/h2>\n

A team of US trade delegates is reportedly due to fly to Shanghai next week to re-open trade talks with Chinese officials.<\/strong>\u00a0These talks will be the first since the Trump\/Xi meeting at the recent G20 summit. These will also be the first talks since negotiations broke down in May.<\/p>\n

Market Remains Hopeful<\/strong><\/h2>\n

Optimism, in response to news of a successful meeting between Trump and Xi in Japan last month, \u00a0was clearly visible in asset markets.<\/strong>\u00a0US equities surged to fresh highs. Tensions\u00a0had been boiling over prior to the meeting between the two leaders. Both countries were engaged in a fresh round of tit-for-tat tariffs as well as other hostilities.<\/p>\n

Groundwork In Place<\/strong><\/h2>\n

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have spoken with their Chinese counterparts earlier in the month to lay the groundwork for the talks.\u00a0While there is optimism over these fresh efforts to deliver a deal, there are still plenty of key issues causing division such as laws around intellectual property and the forced transfer of foreign technology.<\/strong><\/p>\n

IMF Downgrades World Growth<\/strong><\/h2>\n

The latest IMF update released this week has highlighted the urgent need for a resolution to the situation. In its half-yearly World Economic Outlook,\u00a0the IMF projects global growth to be 0.1% lower in both 2019 and 2020 than it forecast last time around.<\/strong>\u00a0Now, forecasts are 3.2% and 3.5% respectively.<\/p>

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IMF: China Hurt More Than US<\/strong><\/h2>\n

The report did, however, endorse Trump\u2019s claims that the trade war has hit China harder than the US.\u00a0The report\u2019s country-by-country breakdown showed an upgraded forecast for US growth this year. US growth increased from 2.3% to 2.6%. On the other hand, it was a downgraded forecast for China. Growth was expected to move from 6.3% to 6.2%.<\/strong><\/p>\n

Commenting on China in the report, the IMF said:<\/p>\n

\u00a0\u201cIn China, the negative effects of escalating tariffs and weakening external demand have added pressure to an economy already in the midst of a structural slowdown<\/strong>and needed regulatory strengthening to rein in high dependence on debt.\u201d<\/p><\/blockquote>\n

IMF Warns US<\/strong><\/h2>\n

Despite the upgraded US growth forecast, the IMF did have a message of warning for the US.\u00a0<\/strong>They said that\u00a0\u201cMultilateral and national policy actions are vital to placing global growth on a stronger footing.\u201d<\/p>\n

They further said:<\/p>\n

\u201cThe pressing needs include reducing trade and technology tensions and expeditiously resolving uncertainty around trade agreements (including between the UK and the EU and the free trade area encompassing Canada, Mexico, and the US). Specifically,\u00a0countries should not use tariffs to target bilateral trade balances or as a substitute for dialogue to pressure others for reforms.<\/strong>\u201d<\/p><\/blockquote>\n

Technical Perspective<\/strong><\/h2>\n

\"usdcnh\"<\/a><\/p>\n

USDCNH has ground to a halt over recent weeks as the market awaits new updates on the first set of trade talks to take place. Interestingly, USD has weakened against CNH since trade talks collapsed in May. However, we have seen a recovery of around 50% since the June lows.<\/p>\n

For now, USDCNH remains hemmed in between support at the 6.8182 level and resistance at the 6.8982 level. A topside break will put the focus back onto 6.94812. On the other hand, a move to the downside brings 6.7484 into play next.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex While attention is mainly directed towards Europe given the keenly anticipated ECB meeting tomorrow, as well as news that\u00a0Boris Johnson is now the new UK Prime Minister, the\u00a0US\/China trade story is about swing back\u00a0into the spotlight. US Delegates Head to China A team of US trade delegates is reportedly due to fly to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-152096","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/152096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=152096"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/152096\/revisions"}],"predecessor-version":[{"id":152101,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/152096\/revisions\/152101"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=152096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=152096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=152096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}