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In view of Deutsche Bank analysts, the main event today is the resumption of trade talks between the US and China, which are taking place in Shanghai.

Key Quotes

“To recap where we are, following the escalation in May where the US imposed higher tariffs on China and President Trump accused China of trying to renegotiate the agreement at the last minute, the US and China reached a truce and agreed to resume talks last month at the G20 meeting in Osaka.”

“At the meeting, President Trump opted not to put tariffs on the remaining $300bn of Chinese imports which had been threatened, and also offered a concession on Huawei, while China agreed to buy more products from the US. Little has been heard since though on how things are progressing.”

“The longer things remain uncertain the more risks there are to the global economy. This is one of the biggest dilemmas for the FOMC as they today start their 2-day meeting ahead of tomorrow’s announcement.”