The trade war saga has no end. The U.S. and Chinese President expressed optimism about resolving their trade dispute ahead of G20 meeting at the end of November.
Trump twitted:
Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!
— Donald J. Trump (@realDonaldTrump) November 1, 2018
According to Bloomberg Trump wants to reach a trade agreement with China at the G20 meeting. In comments Xi said he hoped China and the USA would be able to promote a steady and healthy relationship.
Neither leader specified any details of possible progress in their first known direct discussion in several months.
The two countries have imposed tariffs on hundreds of billions of dollars of each other’s goods. Recently, Trump threatened to put tariffs on the remainder of China’s $500 billion-plus exports if the disputes cannot be resolved.
The U.S. trade deficit rose to a seven-month high in September. Imports surged to a record high amid strong domestic demand, offsetting a rebound in exports. The politically sensitive goods trade deficit with China jumped 4.3% to a record high of $40.2 billion in September.
Nonfarm Payrolls – October unemployment rate to a 49-year low of 3.7%
Nonfarm payrolls increased by 250,000 jobs in October as US wages recorded their largest annual gain since mid-2008. Further labour market tightening and interest rates rise by FED again in December may be expected.
The Fed is not expected to raise rates at its policy meeting next week. However, October’s strong labor market data could see the U.S. central bank signal an increase in December. The Fed raised borrowing costs in September for the third time this year.
U.S. Treasury yields rose after the data while the US stock index and U.S. dollar and pared gains.
Forex – Commodities – Dollar down on trade war Saga
Currencies hurt by recent dollar buying including the euro and Australian and New Zealand dollars all climbed higher.
The dollar moved lower by 0.3% to 95.989, as U.S. President resumed efforts to resolve the trade war with China. Further, the greenback sank to a seven-day low before U.S. jobs data.
The Australian dollar, which is sensitive to Chinese economic developments, rose 0.6% to $0.7259.
Both the Euro and the British pound rose 0.3% against the dollar. Sterling heads for 2nd best week of 2018 on Brexit hopes, BoE signals. Sterling rose to $1.3037, its highest since Oct. 23. It dropped 0.1% against the single currency but remained near two-week highs after Thursday’s huge jump.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.