Markets on high alert as US and China talks enter second day

Global markets are on high alert on Tuesday as investors patiently wait for progress talks between US and China

US and China market volatility Source: Bloomberg

Market jitters kicked in on Tuesday as investors awaited updates, as US and China negotiations in Beijing enter their second day with hopes of reaching an agreement.

US officials met with Chinese decision makers in Beijing on Monday for the first day of the talks, after US president Donald Trump and Chinese president Xi Jinping agreed in December to a 90-day truce.

The anticipation had investors on high alert, triggering market volatility in currency and local bond markets.

Analysts say if talks end well removal of trade tariffs would put the global economy back on track and would be less likely to spark any further US rate hikes.

IG market analyst, Kyle Rodda says any positive outcome would be met with cautious optimism

'Hypothetically, if the trade war was to end, it would be a massive boost to sentiment. Risk appetite would be piqued. The Australian Dollar would likely lift.

The ASX200 would be a big beneficiary, but global stocks would rally in unison. Emerging market currencies would climb. Bonds would fall in the expectation that a trade war resolution would support a slowing global economy.' Mr. Rodda said.

Australian shares rise on high hopes

Australian shares rose on Tuesday as investors were hopeful that Beijing and Washington would be close to reaching a deal.

The S&P/ASX 200 index rose 0.40% or 21 points on Tuesday at time of writing, while the benchmark climbed 1.1% on Monday.

Index heavyweight Australia & New Zealand Banking Group Ltd jumped 0.5% to a seven-day high, while Westpac Banking Corp strengthened 0.7%.

Energy stocks also advanced upon positive sentiment, held up by a surge in oil prices.

The Australian dollar recovered back above $0.70, after dipping below during last week’s flash crash.

The NZD/USD also paused at $0.6745.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
-
-
-
-
China 300
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.