Global Times reports, citing Chinese experts close to the government
This is a follow-up to their earlier tweet in the day here. The report highlights that the two countries are moving closer to a "Phase One" agreement with a broad consensus said to have been reached, despite differences remaining over the scale of tariff removals:
"The two sides have basically reached broad consensus for the phase one agreement," Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing who is close to the trade talks, told the Global Times on Monday, noting that the two sides are still moving closer to reaching a phase one deal soon, unlike the "contradictory information" in the media reports.
However, the issue of tariffs is still a sticking point with the report noting that the two sides have agreed to roll back tariffs but are having differing opinions over which tariffs should be removed or to what degree the tariffs should be lowered.
As optimistic as the headline sounds, this is nothing we don't already know in my view.
The "Phase One" deal is already nothing but hot air and the two key issues causing an impasse are agricultural purchase commitments and the tariffs removal.
So even if the so-called "broad consensus" amounts to 99% of other issues, it essentially counts for nothing until the US and China can resolve the two issues.
Risk trades aren't really much affected by the report. USD/JPY stays bid around 108.88 with equities and bond yields also staying elevated for the time being but not moving to new highs for the day - and rightfully so.
In any case, it could also be telling that markets have already priced in quite a great deal of this "Phase One" agreement. Or if Trump tweets about later, then perhaps maybe we'll see more of a move in risk trades and markets.