(ATF) In contrast to weeks of Donald Trump and his Secretary of State Mike Pompeo’s aggressive accusations over China’s coronavirus guilt, the trade talks Friday morning Beijing time have been a veritable lovefest.
The US will send tons of pork to China and there’s agreement on implementing the first phase of a trade deal as agreed in January.
That’s all Asian markets needed to hear. Stocks advanced across Asia; later in the day European stocks and US futures followed suit.
And it was a good day for the yuan. The PBoC had set parity at an optimistic 7.0788 compared to Thursday’s weak 7.0931 and traders validated the central bank’s take on things: by 6pm HK time, CNY traded at 7.0762.
And not just that: CNH, the offshore CNY, reconverged with its onshore twin and traded at 7.0851. Much of the damage done to the yuan last Friday has been repaired as – knock on wood – Trump has not followed through on his threat to bar certain US portfolio investment in China.
Note also that not just the yuan, but also Chinese stocks. The CSI300 Index gained 0.99% and now is up 4.85% for one month, 4 times the percentage of HK’s Hang Seng Index.
With stocks globally faring well, the US dollar relaxed and retreated from 100 levels on the DXY to 99.7510 at 6pm.
It’s further fate will depend on how US markets react to the expected 22 million April loss in US payrolls. Yesterday’s new US unemployment claims did not prove too much of a deterrent to investors.
