The other week, Citi’s economics team informed the market that they thought the chances of a “no trade deal” scenario had gone to 60%. This guess is at odds with Wall Street and all the stock markets that play follow the leader, which, given their lack of negativity, is telling us that a deal is expected.
On the flipside, hopes of a deal rose when US President Donald Trump tweeted that China had called and wanted to restart trade talks. Better still, Reuters reported that Chinese Vice Premier Liu He, who has been leading the talks with Washington, said that China was willing to resolve the trade dispute through “calm” negotiations, and opposed any increase in trade tensions.
All this is great but we know that things can change quickly in Trump-land. And what Donald and China giveth, Donald and China can taketh away.