Caution is Set to Dominate Markets as Trade Uncertainty Returns

WASHINGTON, D.C. – Caution returns on to rule the markets on Tuesday as the trade uncertainty over US-China trade and tensions in Hong Kong continues.

The general tone of the financial markets persists on being cautiously optimistic as the US and China continue with phase one of their long-standing trade talks. However, the relatively positive sentiment was being continually tested by conflicts and uncertainties as the US President, Donald Trump, dismissed the claim that the US has agreed to roll back the tariffs on Chinese goods indefinitely, which was announced by China beforehand. Such types of conflicting signals from the trade talks between the US and China are starting t confuse investors. Moreover, it also fosters global risk appetite as a lot of investors remain in the sidelines.

Following the conflicting performance of Wall Street, stocks in the Asian market struggled to get its bearing on Tuesday. The seemingly slow progress in the trade deal could evoke concerns on global growth, which can ultimately urge risk prevention.

Without any fixed statements and clarity over the US-China trade deal, all eyes are waiting for the US President’s comments as he is scheduled to speak later today and with a deadline for his decision on tariff rollbacks. The president is expected to give his statement to the Economic Club in New York. Any new developments can shed light on the market and would be appreciated by a lot of investors.

On the other hand, Pound has turbocharged on Monday a comment from Nigel Farage came out saying that his Brexit party wouldn’t run against the Conservative seats for the forthcoming election. This optimistic sentiment is an especially early Christmas present to the Prime Minister, Boris Johnson, as it helps raise odds of a secured spot for the Conservative majority in the election in December.

With a 0.3% increase, the economy of Britain has avoided a recession around the Q3 of 2019. However, its pace of growth of 1% remains to be the slowest Britain ever experience for the last ten years.

Also, the US-China trade talks and the uncertainty it evoked to the investors has also affected the crude oil prices. While there is still a cautious optimism surround the trade deal, the constant conflicting statement from both parties strain the confidence of investors and, ultimately, the global sentiment. Given that oil continues to be highly influenced by the concerns on demand and growth, further losses on the crude oil prices could be around the corner when uncertainties over the US-China trade talk persists.