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US-China Seesaw Continue

Just before US markets closed for the Thanksgiving holiday on the 28th of November, Trump signed the Hong Kong pro-democracy bill. The timing was odd – Trump probably tried to sneak it in with most people in the US focused on the holiday, but it was sure to cause anger in China…which it did.

Matters were made worse after the House of Representatives last week passed another bill that interferes in China’s domestic affairs – this time passing the Uyghur Act. This act is aimed at the sanctioning of Chinese officials involved with mass Muslim detainment camps in Xinjiang.

After the week started with China upset, angry and vowing retaliation, their tone softened throughout the week with them clearly wanting the trade talks to progress. China extended an olive branch on Friday by exempting US pork and soybeans from tariffs. Their hope is that the US will cancel the planned 15% tariffs that are due to come into effect on the 15th of December on $160 billion worth of Chinese imports. The atmosphere has seemed to become a bit more friendly and maybe Trump might even cancel these tariffs, only he will now.

The bigger issue is still the Phase 1 trade deal that we have heard about for quite some time now, and we keep on hearing about ongoing talks and progress but there is still no real evidence of it. Expect the unexpected and more headlines for the whole week ahead.

What to look out for this week

On Tuesday and Wednesday, the US Fed have their next meeting with another interest rate decision due. Expectations are for Powell to keep rates unchanged after having already cut 3 times this year and the US economy and labour market in a good position.

On Thursday, the ECB Fed have their interest rate and lending rate decisions with no change expected across any of them.

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Stephan Maritz

Stephan developed his passion for the markets while working in the Stockbroking division of Standard Bank and is especially passionate about trading (Equities and CFDs). Stephan studied at the University of Stellenbosch and completed a BComm Honours (Business Management) with a focus in Portfolio Management and Bonds. He has also passed the JSE Equity Trader's Exam, RE5 and RE1 Exams as well as the Registered Persons Exams (RPEs) in order to give advice on equities and is a full-time trader and portfolio analyst.