{"id":165560,"date":"2020-02-26T11:45:14","date_gmt":"2020-02-26T16:45:14","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=165560"},"modified":"2020-02-26T10:46:30","modified_gmt":"2020-02-26T15:46:30","slug":"is-us-china-trade-deal-under-threat","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/02\/is-us-china-trade-deal-under-threat\/","title":{"rendered":"Is US\/China Trade Deal Under Threat?"},"content":{"rendered":"
February 26, 2020<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

While the majority of last year\u2019s news-flows was dominated by the US\/China trade negotiations, the outbreak of coronavirus in China, which has now spread worldwide, has stolen market attention this year. Understandably, the issue of the US\/China trade deal has fallen into the shadows somewhat.<\/p>\n

Coronavirus a Key Theme at G20 Meetings<\/strong><\/h2>\n

Speaking this week, US Treasury Secretary Steve Mnuchin said that the outbreak of the virus is not forecast to materially impact the US\/China trade deal. However, Mncuhin did acknowledge that this view could shift as more data becomes available in the coming weeks.<\/p>\n

The issue of the coronavirus outbreak was a key theme at the G20 meetings held over the weekend in Riyadh. Finance ministers were gathering there for two-day meetings ahead of the full summit which will be held in November.<\/p>\n

The US Doesn\u2019t Foresee Any Stalling From Coronavirus (yet)<\/strong><\/h2>\n

Speaking with Reuters on the back of the meetings, Mnuchin said:<\/p>\n

\u201cI don\u2019t expect that this will have any ramifications on phase one. Based on everything that we know, and where the virus is now, I don\u2019t expect that it\u2019s going to be material.\u201d<\/p><\/blockquote>\n

However, Mncuhin was clear in acknowledging the risks to this outlook, saying:<\/p>

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\u201cObviously that could change as the situation develops. Within the next few more weeks, we\u2019ll all have a better assessment as there\u2019s more data around the rate of the virus spreading.\u201d<\/p><\/blockquote>\n

The US Still Expects China To Fulfill Trade Deal Obligations<\/strong><\/h2>\n

The trade secretary went on to explain that while China was obviously focused on tackling the virus, it is still expected to fulfill its commitments under the terms of the trade deal. These commitments also include starting the second round of negotiations aimed at delivering a phase two trade deal. However, Mncuhin said that with China fully occupied in fighting the virus, the start of these next negotiations might be delayed.<\/p>\n

In terms of a timeline or the phase two deal, the Treasury Secretary explained that he wasn\u2019t worried, saying:<\/p>\n

\u201cIf we get the right deal before the election, that\u2019s great. If we get the right deal after the election, that\u2019s great. We don\u2019t feel any pressure one way or another.\u201d<\/p><\/blockquote>\n

Data On Watch<\/strong><\/h2>\n

Risk sentiment has been severely diminished over the last week as the coronavirus outbreak has stepped up a level. With a rise in the number of cases and deaths outside of China, traders are once again fearful of the impact of the virus.<\/p>\n

A number of central banks have also highlighted\u00a0the growing threat from coronavirus,<\/a>\u00a0which will put an even greater focus on incoming data over the next month. If data sets from February start to turn lower, this could add further weight to the sell-off in risk assets. The start of phase-two trade negotiations may also be delayed.<\/p>\n

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

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The sell-off in the\u00a0SPX500<\/a>\u00a0has been brutal. Price has now reversed from highs of just below 3400, gapping down below the 3337.75 level at the start of the week, to break below the 3213.82 level yesterday. This is a key support level for the SPX500. While below here, focus is on a further push lower to the 3156.90 level next. This holds the completion of the symmetry swing with the summer 2019 correction.<\/p>\n

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

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

By Orbex While the majority of last year\u2019s news-flows was dominated by the US\/China trade negotiations, the outbreak of coronavirus in China, which has now spread worldwide, has stolen market attention this year. Understandably, the issue of the US\/China trade deal has fallen into the shadows somewhat. Coronavirus a Key Theme at G20 Meetings Speaking […]<\/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-165560","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/165560","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=165560"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/165560\/revisions"}],"predecessor-version":[{"id":165574,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/165560\/revisions\/165574"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=165560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=165560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=165560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}