Asian stocks, US futures and the Yuan are gaining this morning after a Wall Street Journal reported yesterday saying that a US-China deal is close to being finalised. A deal is said to include lifting US tariffs on USD200bn worth of Chinese goods. In order to facilitate a deal, China is reported to be offering to lower tariffs on US farm goods, chemicals and automobile imports as well as other technical measures including reducing government subsidies. As we wrote on Friday, US negotiators are targeting a meeting between Trump and Xi in mid-March, where a final deal could be signed.
We have an interesting week ahead of us with the ECB meeting Thursday and the US employment report on Friday. Focus at the ECB meeting will be new growth and inflation projections and any news on a potential new TLTRO liquidity measure. For those waiting on the latter, we expect they may very well be in for a disappointment. When it comes to the US jobs report on Friday, we look for robust wage growth whereas job growth seem to be off its peak. US-China trade talks will also continue to create headlines and we should look out for a potential date for a Xi-Trump meeting. Finally, this week, China has the annual National People’s Congress where among other things new GDP and inflation targets are set to be announced. It is widely expected that the growth target for 2019 will be 6-6½%. Today we will have the Euro Sentix sentiment survey and Danish currency reserve data.