Thawing US-China Relations Allows Markets To Extend Week’s Rally

Thawing US-China Relations Allows Markets To Extend Week’s Rally

Spreadex  | Aug 25, 2020 09:13

And the good news kept coming. Following Monday’s blood plasma injection, the markets got another boost this Tuesday as the USA and China both appeared to re-up their ‘phase one’ trade deal promises.

Talking formally for the first time since May, US trade ambassador Robert Lighthizer and Vice Premier Liu He – who were meant to be on that Trump-postponed videoconference call a couple of Saturdays ago – reportedly both saw ‘progress’ in China’s implementation of the deal, and are ‘committed to taking the steps necessary to ensure the success of the agreement’.

That the superpowers can still strike a cordial note, despite the numerous ongoing issues they have had over the past few months – ‘China virus’/Huawei/TikTok and WeChat bans/the consulate debacle/sanctions on citizens from both nations – is reassuring for investors, keeping the cold war at a more comfortable temperature.

The FTSE climbed 0.6%, leaving the index just shy of 6150, but at its best levels for around 11 days.

The DAX benefited from a minor revision to Germany’s Q2 GDP reading – down to -9.7% from -10.2% – helping send the bourse 0.8% higher to a 6-month peak of 13170.

Turning to this afternoon and the Dow Jones is looking to add another 200 points once trading resumes stateside. Following its hefty climb on Monday, that would push the Dow past 28500 – a fresh 6-month high, and only 1000 points-ish off its record levels.

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