Well, close to the end-of-year target line and the threshold for new tariffs on $160 billion of US imports from China, the two sides apparently agreed on a “first phase” understanding. And I say with Trump you never know, the details are not yet fully clarified but according to internal sources of the process China will acquire $50 billion of agricultural products from US producers in 2020, in return the US suspends the new taxes expected to come into effect on Sunday, as well as reducing 50% of the existing tariffs on $360 billion of imports from China. A partial deal, which is not at all extraordinary, especially for Trump. Good news could just mean that the conflict will not get worse, which should provide the optimism needed for the Bulls to push the market higher in the coming days.
Equally positive for clearing the uncertainties looming over European squares was the victory of Boris Johnson’s Conservative party on Thursday’s elections. The UK Prime Minister thus earns room to run Brexit by 31 January, as he has secured a very comfortable majority. This has been the party’s best result since Margaret Thatcher won the 1980 elections. The economic and social consequences of a departure between the United Kingdom to the European Union are still unknown, however the clarification of the situation was welcomed by investors who pulled the value of the British Pound, allowing the currency to appreciate approximately 2% against the Euro and against the US dollar. A move that may however bend the Footsie today to a red day, as the two assets generally run counter-cyclically.
