Trade Truce Aftermath; OPEC on tap

This weekend’s trade truce between the US and China delivered a nice start to the trading week for equities all around the globe.  All the major indexes are higher on the reset of trade talks between the world’s two largest economies.  President Trump softened his tone on supplying Chinese tech giant Huawei and signaled he will not raise tariffs, while China will buy more US farm goods.  The concessions from both sides are hardly anything for both sides to brag about, this meeting basically just brings us back to where we were in talks in late April.  While no set timeline has been suggested by both sides, financial markets are appearing to be optimistic we could see something by Autumn.  The political motivation from both sides to reach final trade deal is growing, Trump with his 2020 election and China with the 70th anniversary of the founding of the People’s Republic of China, which falls on October 1. 

As equities globally have green arrows across the board, Treasuries and the Japanese yen are softer as demand for safe-havens eased.  The dollar is stronger across the board, mainly benefiting from abysmal eurozone manufacturing data that saw sharp downward revisions across the continent. 

The greenback will likely see weakness if the ISM manufacturing gauge shows a big miss, potentially flirting with contraction territory.  Leading up to the Fed’s meeting at the end of the month, the dollar should remain on soft footing continued weaker than expected US economic data. 

Hong Kong

In addition to the over year-long trade war, China has a brewing domestic problem, Hong Kong.  Protesters delivered a massive demonstration that took aim at disrupting the ceremony for Hong Kong’s return to Chinese rule in 1997.  Beijing supports Chief Executive Carrie Lam and it appears she is not going anywhere anytime soon or backing down to the protesters’ demand to completely remove the proposal to allow extraditions to China. 

Hong Kong is a fluid situation that will eventually get even more complicated when foreign leaders get involved. 


European manufacturing data took the air out of what was supposed to be a risk on trading day for high-beta currencies.  The euro softened as the region’s key manufacturing purchasing index posted its fifth consecutive month of contraction.

The British pound, which mainly has reacted to Brexit headlines, weakened to the lowest levels in more than a week as we are starting to see many cracks in the UK economy.  Just a couple months ago, markets were considering a rate hike from the BOE, despite Parliament’s inability to get a Brexit deal done. 


Crude prices opened the weak gap higher as the G20 sideline meetings delivered two positive outcomes: the world’s largest two economies resume trade talks and Russian President Putin gave the Saudis the green light to approve cuts by six to nine months. 

Today, the JMMC meeting saw the committee fall in line with what the President Putin and Saudi Crown Prince Mohammed Bin Salman agreed upon over the weekend.  The big surprise from the JMMC meeting was that Iran backed down from their stance of requiring the input of anti-sanctions language in its communique.  Going into the meeting the base case was for the production cuts to be extended until year end.  The potential of having them last until first quarter of 2020 is helping oil stay near its sessions high. 

Markets are highly optimistic the OPEC meeting will see a continuation of production cuts, but the effect will likely see upside as past meetings.  The argument for higher oil prices will likely be hampered surging US production, which has doubled in the last five years and falling crude demand as the global economy continues to have most data points suggest a prolonged slowdown is upon us. 


Gold plummeted below the $1,400 an ounce level after the latest chapter in the US-China trade war saw a reset in trade talks.  The yellow metal’s selloff was the worst in a year, but we should see global growth concerns and fresh stimulus bets from the largest central banks see buyers jump back in.  A finalized trade deal is still far away and we could see talks collapse again in a couple months. 

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.