What’s not yet clear yet is if both sides have agreed that even if the planned 15 December tariff increases won’t go ahead if phase one is agreed.
Hong Kong, China (AFP) — Asian markets rallied Monday after China and the US said they were close to agreeing a mini trade deal, but the pound extended losses on fresh Brexit uncertainty while EU leaders consider extending a deadline for Britain to leave the bloc.
Investors tracked a strong lead from Wall Street, where the S&P 500 flirted with another record, after the US Trade Representative’s office said the top-level negotiators had held talks Friday and were “close to finalizing” an agreement.
And the Chinese Commerce Ministry said both sides agreed to “properly address each other’s core concerns,” fueling hopes the economic superpowers are on course to a resolution to their long-running and painful tariffs spat.
The two are aiming to get the pact ready to be signed by Donald Trump and Xi Jinping when they meet at next month’s Apec meeting in Chile.
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Hong Kong rallied 0.7 percent in early trade and Shanghai was up 0.3 percent with gains tempered by data showing a drop in profits for China’s industrial giants last month. Tokyo ended the morning 0.3 percent higher and Seoul was up 0.4 percent.
Sydney, Taipei, Jakarta and Manila all put on 0.1 percent.
However, while the agreement would be a big positive for markets, analysts point out that it is still the first part of a wider deal that could take some time to complete.
And Ray Attrill at National Australia Bank said: “What’s not yet clear yet is if both sides have agreed that even if the planned 15 December tariff increases won’t go ahead if phase one is agreed, whether there will be any wind back of the higher tariffs imposed on 1 September.”
That issue, he said, was “something China was said to be demanding toward the end of last week but we doubt the US is ready to concede on.”
Still, the mood on trading floors is positive and expectations that the Federal Reserve will cut interest rates again at its latest policy meeting this week were also providing support.
Sterling edged down with focus on Westminster, where MP will vote later in the day on whether to grant Boris Johnson a 12 December general election, which he has called for to break the Brexit deadlock.
With lawmakers refusing to pass his divorce deal before Thursday’s deadline, the prime minister wants a snap poll he hopes will give him a majority of MP who will push it through parliament.
