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Amid a series of tier-1 data, the spotlight falls on the Trump-Xi meeting expected into the end of the week, making it one to watch for whether we could be closing in on a turning point for markets.
Trump-Xi at the G20
The highlight for the week ahead is with little doubt the meeting between the head of states of the US and China at the side lines of the G20 meeting. As illustrated last week, the base-case scenario that we are looking for remains one in which a ‘deal’ or framework for further talks is being put into place that could lessen the likelihood for further tariffs escalations up ahead, a bullish scenario at its base. Evidently, it will not be in the best interests of both parties to see further ramp-up of tensions, though the thorny nature of the issues undermines the probability. Markets have continued to suffer the turbulence of the tension in US-China ties this week via last weekend’s APEC meeting’s conclusion and the latest accusations from the US Treasury Representative. The result of the meeting into the end of next week is anybody’s guess and certainly a reason to drive markets regardless of the outcome. For Asia markets that had largely been in consolidation, such as the A50 index below, this may be the event to trigger a breakout from within.