Stocks rebound amidst confusion over US-China trade deal

Sterling hits a seven-month high

Global markets are on the rebound today as Donald Trump created yet more confusion over the ‘will he/won’t he’ trade deal with China.

The US president worried investors around the world after he suggested he might wait until after the presidential election in November 2020 to agree a Sino-US trade deal.

Trump’s announcement sent stocks sliding in London and New York last night, however they rallied today after Bloomberg reported that Washington and Beijing are moving closer to a deal.

According to an unnamed source, the President’s comments were “off the cuff” and therefore no indicator that talks were stalling.

Trump has since told reporters at a meeting of NATO leaders near London that discussions “are going very well”.

Wall Street has reacted positively to the news. The Dow Jones waso up 0.75 per cent at 27,708.81 at the time of writing, while the S&P 500 saw a 0.7 per cent increase to hit 3,114.90.

London's FTSE 100 was up by 0.42 per cent at 7188,50. London’s gains were moderate when compared to European markets, which were all up one per cent or more, with the DAX up over 1.51 per cent in afternoon trading as sterling hit a seven-month high.

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With expectations that Boris Johnson will win the UK’s general election next week, the pound was up 0.4 per cent against the dollar at 1.3049 and 0.5 per cent stronger against the euro at 1.1787.

It seems that Trump’s latest rhetoric failed to reach the Asian press before the markets there closed, as most failed to recover. In Japan, the Nikkei 225 was down 1.0 per cent at 23,135.23, as the yen weakened 0.03 per cent against the dollar to trade at JPY 108.66.

Most cryptocurrencies have traded sideways so far this week, and Etheruem continues to hover at 149.47 against the dollar. However, Bitcoin has seen a rise of 2.50 per cent to reach 7495.5 against the dollar.

Commodity prices are also taking a hammering, as investors fear global growth will be hit by the continuing US-China trade war. Silver is down 1.98 per cent to 16.80 per ounce, gold fell 0.35 per cent to $1,472.20 per ounce, while natural gas was trading with a heavy cut of 2.01 per cent at $2.39.

However, there is more bullish news for oil, which continues to rise. At the time of writing trading was up an impressive 3.46 per cent to $58.26.

With Trump still unable - or unwilling - to come to a conclusion over a phase-one deal, investors will continue to closely watch the market.

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