Investors hope for end to market jitters after US-China trade truce
Investors will be hoping for more stable trading this week after a preliminary trade agreement between the US and China marked a possible end to months of market volatility.
President Donald Trump hailed the “biggest deal ever” after reaching a limited trade deal with China on Friday.
Read more: Donald Trump reveals phase one trade agreement with China
The agreement will see the US hold off on further tariff increases, while China has pledged to increase agricultural purchases from the US.
Stocks rallied following the breakthrough, marking an end to a tumultuous week of trading, and gains could carry over into this week.
However, analysts said the agreement lacked detail and warned that it neither rolled back existing tariffs nor offered a solution to rising tensions caused by the US’s crackdown on Chinese tech firm Huawei.
“Traders view the deal in a tentative light as a tariff detente falls well short of bridging the critical trust gap, which is an implicit removal of a significant chunk of existing tariffs,” said Stephen Innes, Asia Pacific market strategist at Axitrader.
“The next 48 to 72 trading hours are critical given memories of how quickly the post-G20 trade calm evaporated.”
Read more: Donald Trump says US-China trade talks going well
But US markets could also get a boost from the Federal Reserve, which is set to start buying $60bn (£47.5bn) of Treasury bills per month on Tuesday in a bid to boost its balance sheet.
Investors will also keep a close eye on key economic data due to be published this week, including US retail data and China’s quarterly GDP estimate, alongside the country’s industrial production and retail sales.
Main image credit: Getty