Shares in Asia jumped in Friday morning trade following news that Washington and Beijing have agreed to a phase one trade deal in principle, pending U.S. President Donald Trump’s approval.
Meanwhile, the Bank of Japan’s “tankan” survey released Friday showing business confidence among the country’s large manufacturers diving to its lowest level in more than six years.
The moves came amid U.S.-China trade optimism. The White House has offered to scrap the next round of tariffs on Chinese exports to the U.S. that are set to take effect on Sunday, sources told. Washington has also proposed slashing existing duties on $360 billion in Chinese products by 50%.
“It is important to realize that there still hasn’t been any official announcements but between Trump’s tweets and reports by the media, there’s more reason to believe that minimally, tariffs will be delayed,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in an overnight note.
“As we’ve learned the hard way, (Trump’s) attitude and decisions can change last minute so until he makes an official announcement which must occur before December 15th, the tariffs could still be be imposed,” Lien warned.
Movements in the British pound were also watched on Friday, with the British currency surging 2.39% to $1.377 after an exit poll showed U.K. Prime Minister Boris Johnson’s Conservative Party winning a clear majority of parliamentary seats in Thursday’s general election.
Trader Georgi Bozhidarov