The US-China Phase 1 deal represents a milestone as it grants a de-escalation of trade tensions, and reaches some commitments on intellectual property and technology issues. It should provide some reprieve to the global economy as some uncertainty is lifted.
US and China are reportedly finalizing a series of long-running corporate deals ahead of the signing ceremony of the first phase of the trade deal this week. President Trump has indicated he would like to start second phase negotiations right away, but these may not finish until the US elections.
China – Economic Transformation Brings Opportunities
By Celestee Tan
Five areas related to China’s new economy could grow rapidly as a result of economic transformation, and hence Citi analysts overweight Internet, Healthcare, Consumer, and Communication (for 5G).
Economy/Politics
US
Asia Pac / EM
Europe
Equities
Currencies
Early Christmas Cheer on Trade and Brexit Clarity
By Jessica Tan
Risk assets were fueled by optimistic newsflow on two fronts. One, US President Trump is said to have in-priciple agreed to a phase “one” trade deal in the final stages of discussion between US and China. Two, incumbent PM Boris Johnson won the UK snap election with a stronger-than-expected majority, clearing the path to a long drawn-out Brexit.
Last week, US President Trump signed the Hong Kong Human Rights and Democracy Act, which had previously passed the US House & Senate. While it could complicate US/China trade talks, Citi analysts believe that negotiations are unlikely to be derailed ultimately.
