Trade war truce? Washington and China to reopen trade talks
S&P 500 futures rose after the news
Chinese trade officials will meet with their US counterparts in Washington next month to discuss the current commercial conflict (Bloomberg). The US equity market rallied on the news, also supported by strong private payrolls data in August (see chart above). Rising trade barriers between the two large economies have slowed global growth and threatened to help precipitate a US recession. If government representatives are able to de-escalate current tensions, restore confidence, and facilitate trade flows between the two economies this could boost import demand and support global growth. With a recovery in industrial activity in Asia, regional demand for petrochemicals would also be supported. But the on-again off-again negotiations have so far only resulted in deteriorating relations and it remains to be seen if the planned talks will lead to substantial progress.