Will it happen?
It is a hard job keeping up with US led geo-politics as we start 2020, but we are most likely back to focusing next week on the US-China phase 1 trade deal signing. As long as President Trump and Twitter co-exist we can expect the drama of swings in policy, threats, promises and fast paced responses to keep flowing. One thing that I find interesting is that even though the US President now has a direct channel to the world, his policy stills seems to shift from day to day. Perhaps it is something about human nature that we just see writ large in Trump's actions as he acts first, then thinks about it and acts again. Well, you know what the army say, 'plan early, plan twice' ;-).
The deal is to be done, but what's the deal?
Finally the phase 1 trade deal is due to be signed and what a journey it has been. Or rather, what a journey it still will be. China's Vice Premier Liu He is due to sign a Phase 1 deal in Washington next week. US President Trump said that the Phase 1 deal with China is due to be signed with China on January 15 at the White House and that he would then travel to Beijing to begin talks on the next phase. The phase 1 deal is expected to cut existing tariffs and boost Chinese purchase of US agricultural, energy and manufactured goods. However, as of yet there is no public text to the agreement and the main Intellectual Property issues remain unresolved.
Watch our for risk off flows of the deal flops
So much uncertainty remains. Watch out for a choppy week as the market responses to twitter, reports (both false and true). One things certain it is a lively 2020 start. If the deal is signed then the detail will be the immediate focus. Watch out for any surprises. Of course, if the deal id not signed, watch out for safe haven flows in CHF, JPY, Treasuries, and gold.
