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US and China Reach First Phase of Trade Deal
15 décembre 2019 — 2 min read
The AUDUSD opens at 0.6885 (mid-rate) and the NZDUSD opens at 0.6605 (mid-rate) this morning.
At Last! After months of negotiations the US and China finally managed to reach an agreement on a phase one trade deal, late on Friday evening.
The agreement includes a commitment from China to make substantial additional purchases of US goods and services in the coming years along with agreeing to make structural reforms and other changes to its economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. In return the US agreed not to impose a new 15% tariff on approximately $160 billion worth of Chinese goods as well as reducing the current 15% tariff on $120 billion worth of Chinese goods to 7.5%. The agreement is an early Christmas present for global central banks and is likely to lead to a spike in risk appetite.
The British pound was the best performing of the G10 currencies following Boris Johnson’s Conservative party victory. At one point on Friday the pound was up circa 3.5% on the news before retracing the move and closing up 1.3% on the day.
Tomorrow’s RBA meeting minutes along with Thursday’s employment report are the key drivers for the AUD over the course of the week.
Direction for the NZD during the week ahead will be dictated by tomorrows ANZ business confidence report ahead of Thursday’s quarterly GDP data release.
Global equity markets had a positive close on Friday - Dow +0.01%, S&P 500 +0.007%, FTSE +1.10%, DAX +0.46%, CAC +0.59%, Nikkei +2.55%, Shanghai +1.78%.
Gold prices were little changed on Friday, closing out the week at $1,475 an ounce. WTI Crude Oil prices pushed higher on Friday, up 0.8% closing out the week at $59.98 a barrel.
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