Markets bounce back as China and the US strike a “mini trade deal”

APAC News mural of US President Donald Trump with Twitter Account image

DID DONALD TRUMP’S SPIKE IN TWITTER POSTS PROVIDE CLUES AS TO WHERE THE US PRESIDENT WAS HEADING ON TRADE TALKS WITH CHINA?

Top Australian economist takes a novel approach, doing the numbers on President Trump’s Twitter output, correctly predicting it pointed to a China trade compromise   

Story: Marcus Reubenstein
(Main Image: Pixabay/Digital Manipulation: APAC News)

One of Australia’s most respected, and accurate, economists predicted the trade compromise struck between the US and China by analysing the number of times President Donald Trump had taken to Twitter over the past month.

A day before the “mini US-China trade deal” was announced, AMP Capital Chief Economist, Shane Oliver noted that the US commander-in-chief’s tweets had “gone through the roof” in September with Donald Trump taking to Twitter 797 times, or 26.6 tweets per day. He even went to the trouble of charting Donald Trump’s tweets as far back as the 2016 Presidential Campaign, Dr. Oliver called it right in saying it was a signal that the US President was under pressure and deal was on the cards.

Commenting on the eventual deal, Dr. Oliver said, “This was about the best deal that could have been expected. The details are pretty vague but key elements involve China buying more US agricultural products and making some commitments around IP protection, financial services and currency in return for the US suspending the October 15 tariff hike from 25% to 30% on $US250 billion of imports from China.”

The US President says the first phase of the trade deal will be completed over the next three weeks, called it “very substantial” and announced the second phase will start immediately after the ratification of phase one.  

As part of that deal China will purchase about US$40 billion to US$50 billion of US agricultural products, which President Trump said was a “tremendous deal for the (US) farmers.”

The Chinese delegation to Washington was led by Vice Premier Liu He and, in reporting on the meeting, the Xinhua News Agency said, “the two sides achieved substantial progress” and that both China and the US were committed to eventually reaching a formal agreement.   

The announcement should relieve political pressure on both sides as well taking some pressure off the global financial markets.

Following last week’s global equities rout, leading markets recovered some of their losses, Wall Street rose 0.6% for the week, Eurozone shares gained 1.8%, Japanese shares were up 1.8%, China’s market rose 2.5%, and Australian shares moved ahead by 1.4% led by health, telecommunications, IT and industrial shares.

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