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Global financial markets responded with a sharp rise to the news of a trade truce between the US and China, which agreed to significantly reduce customs duties on imported goods for 90 days.
According to the Financial Times, futures on key US indices rose in the first hours of trading: The S&P 500 added 2.7% and the Nasdaq gained 3.5%. In Asian markets, the Hang Seng index in Hong Kong rose by 0.8% and China’s CSI 300 by 0.6%.
Currency markets also reacted positively, with the US dollar strengthening by 1% against a basket of major currencies and the Chinese yuan gaining 0.1% to 7.23 yuan per dollar.
At the same time, investors are turning away from defensive assets – in particular, the price of gold fell by 2.8%, indicating a growing appetite for risk amid new prospects for stabilising relations between the two economic giants.
The agreement on a temporary reduction in duties is perceived by markets as a signal of de-escalation in the trade war that has been going on since 2018 and has dealt serious blows to the global supply chain and consumer demand.
Analysts predict that if further progress is made in the negotiations, the positive dynamics may continue. However, they stress that the agreement is temporary, and markets remain vulnerable to new political risks.
