The U.S. and China are closer to agreeing on tariffs

An unusual sense of tranquility has descended on China’s financial markets. The country’s stocks and government bonds have slowed to a crawl. The Shanghai Composite Index reached lows in volatility unseen in nearly two years, while the benchmark 10-year bond yield is moving in the narrowest range since 2012. And despite some drama for the yuan this week, implied volatility remains near the lowest since August. (Bloomberg)

The U.S. and China are moving closer to agreeing on the number of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said. The people, who asked not to be identified, said that U.S. President Donald Trump’s comments Tuesday downplaying the urgency of a deal shouldn’t be understood to mean the talks were stalling, as he was speaking off the cuff. Recent U.S. legislation seeking to sanction Chinese officials over human- rights issues in Hong Kong and Xinjiang are unlikely to impact the talks, one person familiar with Beijing’s thinking said. (Bloomberg)


Source: Danareksa Sekuritas Debt Research
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