{"id":157249,"date":"2019-10-10T07:32:00","date_gmt":"2019-10-10T11:32:00","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=157249"},"modified":"2019-10-10T07:17:29","modified_gmt":"2019-10-10T11:17:29","slug":"mixed-trade-negotiation-signals-rattle-financial-markets","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/10\/mixed-trade-negotiation-signals-rattle-financial-markets\/","title":{"rendered":"Mixed trade negotiation signals rattle financial markets"},"content":{"rendered":"<div id=\"inves-2267229731\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">October 10, 2019<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By Hussein Sayed, Chief Market Strategist (Gulf &amp; MENA), <a href=\"http:\/\/countingpips.com\/contributors\/contributor-profile-forextime\/\">ForexTime<\/a><\/strong><\/p>\n<div class=\"article-body\">\n<div class=\"field-body\">\n<div class=\"field-items\">\n<div class=\"field-item even\">\n<ul>\n<li>S&amp;P 500 futures recover after 1.3% drop in early trade<\/li>\n<li>Yuan climbs on reports of US-China currency pact<\/li>\n<li>FOMC minutes show sharply divided Fed<\/li>\n<\/ul>\n<p>Investors across the globe are closely monitoring the high-level US-China trade talks, which will kick off today as China\u2019s Vice Premier Liu He sits on the table with US trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.<\/p>\n<p>Several trade-related headlines have been released prior to the meeting and looking at the market\u2019s reaction, there seems to be lot of confusion. Wall Street and European Indices climbed yesterday after reports showing Chinese officials offered to increase purchases of US agricultural products in the hope of reaching a partial deal.<\/p>\n<p>Earlier this morning, S&amp;P 500 futures spiked lower, falling \u00a01.3% after the South China Morning Post reported that the two countries had made no progress on key trade issues during deputy level talks, and Vice-Premier Liu He may leave earlier than expected. However, futures pared most of the losses following a story from the New York Times that Washington will issue licenses allowing some US firms to supply non-sensitive goods to Huawei Technologies.<\/p>\n<p>The Chinese Yuan climbed more than 0.3% this morning following Bloomberg\u2019s report that Trump\u2019s administration is looking at rolling out a previously agreed currency pact. Such an agreement may lead to further strength in CNY, but details of the pact are needed to better assess the magnitude of the move.<\/p>\n<p>There\u2019s obviously a lot of noise in the markets, and no one knows for certain how the latest round of negotiations will end. The lack of clarity will keep trading volumes low and volatility high, but it seems investors are remaining defensive for now. If talks break down and Trump\u2019s administration raises tariffs next Tuesday, we are likely to see another steep selloff in risk assets.<\/p>\n<p><strong>Federal Reserve needs to better align with market expectations<\/strong><\/p>\n<p>The minutes of the FOMC released yesterday showed sharp division among its members about the future path of US monetary policy. Some policymakers are worried that markets are heavily betting on further easing following the two rate cuts in July and September. That\u2019s obvious when you look at Fed funds futures rates compared to the Fed\u2019s own dot plot.<\/p>\n<p>Aligning with market expectations first requires consensus among policymakers, but Fed members are becoming increasingly divided.<\/p>\n<p>The minutes didn\u2019t have a significant impact on markets yesterday. Investors still anticipate an 85% chance of a rate cut by the end of the month according to CME\u2019s Fedwatch Tool. This probability may change depending on the outcome of trade talks and upcoming data, \u00a0with today\u2019s consumer prices and Friday\u2019s Consumer Sentiment in focus.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><em><strong>Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n<hr \/>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-54242 alignleft\" src=\"https:\/\/www.countingpips.com\/articles-analysis\/wp-content\/uploads\/2014\/07\/Forex-Time-Logo.png\" alt=\"Forex-Time-Logo\" width=\"262\" height=\"90\" \/><strong>Article by <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.countingpips.com\/contributors\/contributor-profile-forextime\/\">ForexTime<\/a><\/span><\/strong><\/p>\n<p><strong>ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 <a href=\"http:\/\/www.forextime.com\" target=\"_blank\" rel=\"noopener noreferrer\">www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Hussein Sayed, Chief Market Strategist (Gulf &amp; MENA), ForexTime S&amp;P 500 futures recover after 1.3% drop in early trade Yuan climbs on reports of US-China currency pact FOMC minutes show sharply divided Fed Investors across the globe are closely monitoring the high-level US-China trade talks, which will kick off today as China\u2019s Vice Premier [&hellip;]<\/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-157249","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/157249","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=157249"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/157249\/revisions"}],"predecessor-version":[{"id":157256,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/157249\/revisions\/157256"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=157249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=157249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=157249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}