6 to 12 January: Looking beyond the Phase One trade deal

The US and Chinese administrations are set to sign the Phase One trade deal on the 15^th January putting (at least a short) pause in the two-year long trade war. Furthermore, the two parties have – allegedly – agreed to hold semi-annual talks to push for economic reform and resolve disputes. The agreement could include a dispute-resolution section that envisions consultations between the two nations to handle any conflicts arising from the agreement. The new talks will be separate from negotiations over a second phase of the trade deal, which is expected to cover fundamental Chinese economic policies, including corporate subsidies and the activities of Chinese state-owned firms. The two sides are considering naming the process the Comprehensive Economic Dialogue, according to multiple sources cited by various media outlets.

Looking forward, this week’s data calendar features trade data from China and India, high-frequency macroeconomic data from the US (such as inflation, retail sales and industrial production), and several Federal Reserve officials could provide insights on the course of the Fed’s policy. Investors will most likely look out for news on geopolitical risks, whilst also awaiting the signing of the Phase One US-China trade deal.

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