21 to 27 October: Deal or no deal, that is the question

Although the number of economic data releases was limited during the week, we received very important pieces of information regarding the US-China trade negotiations, which contributed to the improvement of global market sentiment. According to the Chinese administration, parts of the text for the first phase of a trade deal with the US are ‘basically completed.’ The US Treasury made a similar statement. Presidents Trump and Xi Jinping aim to seal the phase one trade deal in Chile in November.

This week, both the economic diary and the policy agenda are very busy with potentially market-moving releases and announcements. The 4th plenum of the Chinese Communist Party Congress Convention will take place this week. This will be an important meeting to set the stage for economic reform agenda for the next few years, in our opinion. In the US, the Federal Reserve will most likely reduce the Fed funds rate again, by 25bp after which Chair Powell will talk to the markets to provide guidance. In terms of the economic diary, both the US and China will reveal their respective manufacturing PMI indices. In addition, we will have a chance to assess the first reading the of US’ 3Q19 GDP data as well as the October jobs report.

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