A sigh of relief. The economic truce between China and the United States has been extended, leading to an upturn on the stock markets on Tuesday. Is this a real underlying trend or just a temporary respite?
Asian and European stock markets up this morning
Asian markets closed higher last night following the postponement of the truce between the US and China. Japan’s flagship stock index, the Nikkei, ended the day up 2.15%, also buoyed by significant gains in the tech sector. On the Chinese side, the Shanghai Stock Exchange closed up 0.50%, while the Hong Kong Stock Exchange was up 0.25%. However, South Korea’s main stock index, the Kospi, closed down 0.53%.
Europe also woke up in positive territory. In France, the CAC40 was up 0.53% at around 10 a.m. The London Stock Exchange rose 0.28%. The Zurich Stock Exchange was flat, up 0.07%. The STOXX Europe 600 index was up 0.31% at the same time, reflecting a broad-based improvement.
Another delay in reaching an agreement between the United States and China
The truce between the United States and China was due to end on Tuesday, but it has been postponed for 90 days. This is a good sign: negotiations are underway between the two economic powers, which have been engaged in an intense trade war in recent months. The postponement of the truce was expected, as the tone between Washington and Beijing has softened in recent weeks. On the US markets, the reaction will certainly remain cautious. Investors are awaiting the release of inflation data today. Lower-than-expected inflation could prolong the global upturn, while an upward surprise could slow momentum.
While the truce is therefore being welcomed with relief, the issues raised between China and the US remain unresolved. Supply chains, technological issues and the defense of each side’s fiat currencies are giving rise to particularly crucial discussions between the two world powers.
