Published: Thu, January 10, 2019
Markets | By Otis Pena

What hope for markets in the US-China trade talks?

What hope for markets in the US-China trade talks?

Since then, the two countries have exchanged several rounds of trade tariffs, levying duties of hundreds of billions of dollars.

A statement from the US Trade Representative said the talks "focused on China's pledge to purchase a substantial amount of agricultural, energy, manufactured, and other products and services from the United States".

Indexes in Europe and Asia made bigger gains. But aside from some soybean purchases, there has been little sign of big-ticket acquisitions. Trump said in a tweet on Tuesday.

China says it is trying to protect its own economic interests and has accused the USA of violating global trading rules.

Big spending on commodities and goods would send a positive signal on China's intent to work with the United States, but would do nothing to resolve the US demands that require hard structural change from China.

Hopes that the USA and China would strike a deal, ending their months-long trade deal led to an index of world stocks rising on Tuesday, while the dollar, which hit an 11-week low on Monday, rebounded as the euro weakened on concerns about a slowdown in the euro zone economy.

People familiar with the U.S. -China relationship for years.

Tesla broke ground this week in Shanghai on its first factory outside the U.S. Musk said production of its Model 3 would start late this year. Liu made a brief appearance at the talks in Beijing on January 7, boosting optimism that China was serious about making progress on a deal.

The paper said in an editorial that Beijing's stance remained firm that the dispute harms both countries and disrupts the global trade order and supply chains.

Also, if Washington refuses to extend the Iranian crude oil import waivers it granted in November to eight large buyers-including China and India-they will need an alternative source of crude and it might just be the United States.

But it also said any deal with China must be followed up with ongoing verification and enforcement.

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ANALYST'S TAKE: "While there was agreement on less thorny issues such as agriculture and energy, US demands for verification and enforceable targets on intellectual property rights, transfer of technologies and non-tariff barriers may not be that easily addressed", DBS Group Research strategists Eugene Leow and Neel Gopalakrishnan said in a commentary.

"I think China wants to get it resolved".

Asian markets rose on increasing optimism that the two sides would be able to hammer out a deal ahead of a March deadline and avert further import tariff hikes.

"We can confidently say that enough progress was made that the discussions will continue at a higher level", said Craig Allen, president of the U.S.

In another sign of subsiding worries about the U.S. economic outlook, Fed funds rate futures show traders are now pricing in a small chance of a rate hike in 2019, a change from late last week when futures markets had priced in a cut by the end of the year.

The talks were the first face-to-face meeting between the two sides since their leaders met December 1.

A Chinese foreign ministry spokesman, Lu Kang, announced the talks had ended.

US Commerce Secretary Wilbur Ross signalled on Monday that there was a "very good chance" of reaching an agreement.

However, people familiar with the negotiations told Reuters on Tuesday the two sides were further apart on Chinese structural reforms that the Trump administration is demanding in order to stop alleged theft and forced transfer of US technology, and on how China will be held to its promises.

"After a terrible December for risk markets, crude oil continues to catch a positive vibe", said Stephen Innes at futures brokerage Oanda in Singapore, noting that investors were growing less fearful that U.S.

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