WASHINGTON, D.C. – The US stocks continue its upward momentum, ascending to new heights as the US President hypes trade deal between the US and China.
The recent updates on the trade agreement between the two of the largest economies in the world have powered up the stock market early this week. It mostly started when the president Trump positively hinted that phase one of the trade deal might be finalized before 2020 rolls in, then the news of a phone call between the trade negotiators from both countries further boosted the market on Tuesday.
But the uptrend for the US stocks didn’t stop there as gains are tracked for the three major indices in the US on Wednesday following President Trump’s trade hype. Later on Tuesday, Trump confirmed that the US and China are nearing the completion of the initial phase of the agreement to end the two countries’ long-standing trade war. He said that negotiations on the temporary agreement are already on the final stages, and discussions are positively progressing.
The trade hype train has further pushed the Wall Street into new record highs, calming the nerves of market players who were largely anxious on the tariff increase Washington was expected to impose Chinese goods starting on December 15.
As equities power ahead, there still hasn’t any more reaction outside of stocks. Commodity currencies such as kiwi and loonie tracked some moderate gains, while the more defensive yen continues to decline a bit.
It suggests that although the positive sentiments on the trade deal have been good, market players haven’t bought the recent cheerful narrative yet, still remaining a bit skeptical until further concrete trade news comes.
Even with the new record highs, analysts say that extra caution may still be warranted as there isn’t any fixed upside that the market is looking towards once the agreement is officially final. Noting, analysts also stated that phase two of the trade negotiations between the US and China would also be thornier, with a lot more issues needed to be ironed out.
On the other hand, the British pound had been largely dependent on the opinion polls as the Election day looms over as it is set for less than two weeks from now. Market players expect a clearer indication later today when Yougov, a market research firm, will publish the highly-awaited poll around 22:00 GMT.
In Asia, the Aussie dollar dropped following the statement from Westpac, one of the biggest commercial banks in Australia, saying that the Reserve Bank is expected to employ QE (Quantitative Easing) in 2020 to help boost economic growth.