On Monday, stock s experienced sustained increases and a recession of bond prices after reports that the United States and China have decided to revive their trade talks reached market participants.  This news triggered investors to trim their riskier stocks when it comes to the dovish strategy of the major central banks.

The agreement on the revival of trade talks occurred last Saturday, subsequent to U.S. President Donald Trump’s compromise with China’s demands during the sidelines of the G-20 Summit.  These demands included no recent issuance of tariffs on Chinese goods and alleviated constraints on the tech company Huawei, conducive to reducing trade tensions with Beijing. Meanwhile, China has granted the United States’ demand of unstated recent purchases of farm products from the U.S. and returning to the trade talks once again.

Richard Franulovich, economist at Westpac, stated that the meeting that occurred between President Donald Trump and President Xi Jinping in the G-20 Summit seems to be an unassuming victory for China and an optimistic route for short-term risk assets.  This was not beyond the reach of the presumed development.

As a result, the E-mini futures for the S&P 500 experienced a 1.1% rise.  The U.S. dollar settled on the yen, which is a known safe haven, as treasury yields experienced a rise and futures restrained wagers for a half-point cut on rates from the Fed for the month of July.  The Federal Reserve experienced a drop of 5 ticks as the market lowered the likelihood of having to cut close to 15% from a 50% drop in the past week.

By: Cyril Latrice Cajanding