Risk sentiment recovered in global financial markets – Danske Bank

Analysts at Danske Bank note that yesterday, risk sentiments in global financial markets recovered somewhat on the back of last week's intensified focus on the US-China trade conflict.

Key Quotes

“Over the weekend China told Trump in a tough article in People's Daily that it knows it has a very strong hand through its huge consumer market. Maybe Trump is realising that his usual tactics of scaring his opponent into a favourable deal is not going to work as well with China, as it has a stronger hand than most other countries. His tweet on Sunday may suggest so: 'President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!' . So while we still expect to see ebbs and flows, we still believe that a solution will be found that does not entail a trade war.”

“Overnight the positive risk sentiment in global financial markets continued amid further signs of the US-China trade dispute ending with a solution, as China's President Xi Jinping promised to open up the economy further and amongst other products lower import tariffs on cars.”