US-China trade dispute headed for negotiations – Danske Bank

Following the escalation of the US-China trade dispute on Friday, we have seen multiple signs that support the picture that it is part of negotiations to reach a deal rather than Trump taking China into a trade war, suggests the research team at Danske Bank.

Key Quotes

“We still expect the endgame to be a deal between the US and China and that the situation will be resolved without a trade war. Last night Trump tweeted: 'Very thankful for President Xi of China's kind words on tariffs and automobile barriers...also, his enlightenment on intellectual property and technology transfers. We will make great progress together!', which is a sign of consolidation.”

“The oil price reached a new year high yesterday on broad based support from the weaker USD, better risk sentiment in markets and bullish comments from Saudi Arabia targeting a higher oil price in the future.”