Deal or no-deal?
Talks have concluded between the US and China in London. President Trump has welcomed the deal, claiming the US has secured access to rare earth materials and tariffs have returned to sustainable levels. However, the announcement of a resolution during talks has lacked two key elements that are leaving many scratching their heads as to whether this agreement constitutes a deal at all. Firstly, a great deal of detail is lacking. Negotiators have claimed to have reached agreement for a deal pending the approval of their respective heads of state but that’s about it. Secondly, from what has been released so far, the accord still leaves tariffs and non-tariff barriers exceedingly high by historical standards.
The framework agreed to in Geneva in May is largely preserved with punitive tariffs unwound, restoring the terms of trade to pre-April 2nd levels. There has so far been very little commentary from either side about the deal other than the claim that it has been agreed. Concerningly, there also appears to be little appetite or intention to continue negotiations in the hope of honing in on a closer, pro-growth agreement between the two nations. Risk assets so far have failed to secure a significant and sustained bid following the announcement on Tuesday night. The Dollar also has failed to offload any of its growing risk premium.
US equity indices initially opened in the green yesterday following a lower than expected CPI inflation report published at the US market open. The data published showed both core and headline inflation coming in at 0.1% month-on-month and headline year-on-year inflation recorded at 2.4% versus a 2.5% consensus forecast. Today sees producer price inflation data released which will be even more closely watched than usual for any sign of change thanks to Trump’s tariffs. Given the scarcity of details surrounding the so-called trade deal, there is still the significant risk of trade headline induced volatility.
Discussion and Analysis by Charles Porter
Related Insights
Daily Brief – Long weekend
Charles Porter
Tue 5 May 2026
Long weekend For the UK, it was a long weekend in the sense that it brought with it the Early May Bank Holiday. For markets, it was a long weekend for a whole different reason. With most of the rest of the world not observing a bank holiday yesterday, market liquidity remained sufficient with few […]
Daily Brief – Delayed fuse
Charles Porter
Thu 30 Apr 2026
Delayed fuse Last night’s Federal Reserve decision held all the potential requirements for a momentous occasion. Markets had been ascribing a high value to the event with options pricing suggesting the decision posed a significant risk towards exposed assets. Ultimately, the potential swan song publication of Chair Jay Powell passed without incident. Claims from some […]
Daily Brief – Cancelled Travel Plans
Charles Porter
Thu 23 Apr 2026
Cancelled Travel Plans No, this time not because of the impending jet fuel crisis threatening continental travel as we discussed yesterday. Instead, I’m referring to the grounding of Vice President Vance whose trip to Islamabad, Pakistan was cancelled on Tuesday to avoid embarrassment. The Vice President was expected to travel on Tuesday to resume talks […]
