Market optimism grows as US-China trade talks show progress, with potential agreements on tariffs, rare earths, and soybean purchases, Commerzbank’s FX analyst Michael Pfister notes.
China may delay rare earths actions for a year
“The most important news, however, concerns the trade conflict between the US and China: a meeting between the two presidents is also likely to take place here. Meanwhile, initial reports yesterday suggested that the trade talks in Malaysia had made progress and that the two countries had reached a preliminary agreement on critical issues such as fentanyl and tariffs on ship deliveries.”
“As so often, we will have to wait and see whether this agreement holds and what the details are. If a far-reaching agreement is reached, however, it is likely to bring great relief to the market. The US Treasury Secretary’s statement that China could postpone action on rare earths for a year is likely to be viewed positively. We will probably learn more details on the sidelines of the meeting between the presidents.”
“One final point: the US Treasury Secretary also emphasised that China would purchase a ‘significant’ amount of US soybeans. China had not purchased a lot of these in recent months, which benefited Brazil. Therefore, there could well be losers in this agreement.”
Source: https://www.fxstreet.com/news/us-china-trade-talks-signal-potential-breakthrough-commerzbank-202510271132
