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China ‘fully expected’ to meet trade deal terms despite coronavirus, top US officials say according to a South China Morning Post article.

Key notes

  • US Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue signed a letter praising China’s progress on trade deal.
  • Statement did not mention coronavirus outbreak but said China ‘fully expected’ to meet terms of phase one deal.

China is taking numerous steps to meet the agricultural commitments made in the phase one trade deal with the United States, according to a statement signed by two top US officials, according to the article.

The note from US Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue, released on Tuesday in Washington, comes amid rising questions whether the rampant economic damage inflicted by the coronavirus outbreak will sharply reduce China’s ability to stick to the terms of the deal.

Without mentioning the virus, which has infected more than 80,000 and killed more than 2,700 people worldwide, Perdue said that he was “encouraged by progress made last week” in meeting the agriculture purchases commitments in the deal and that “we fully expect compliance with all elements of the deal”.

FX Implications

The futures markets are pricing in a return to the norm on the 3m outlook which is up 6% in Asia, despite the uncertainties over the coronavirus.  However, spot-FX is still borrowing its head deep in the sane, with the yen a top performer, taking back its safe haven status in the wake of a bloodbath on Wall Street overniht.