US-China trade deal to be extensive – Danske Bank

In view of analysts at Danske Bank, a US-China trade deal is likely in the second half of the year and they are expecting it to be extensive.

Key Quotes

“We look for a deal, among other things, to roll back tariffs to a large degree. Meanwhile, we see a 15% risk Donald Trump will attack the car industry in a next step.”

“A trade deal would support a recovery in China and emerging markets and stabilise eurozone growth at a time when past monetary easing also starts to support.”

“In equities, a trade deal is largely priced in, leaving risks largely balanced if not slightly on the downside, given the negative 'reality gap' at present.”

“In FX markets, we expect a trade deal to support commodity currencies versus notably JPY; EUR/USD support in 3-6M but muted to negative initial reaction.”