If everything goes right, analysts at Danske Bank expect to see a trade deal by the end of next week.
Key Quotes:
“We see a 75% probability that a signing meeting between Trump and Xi will be announced at the end of the talks next week , probably by Trump himself in the Oval office. The two sides seem to have agreed on 95% of the content and, although a few difficult issues are left, we very much doubt that Trump will walk away from a deal.”
“It would be too costly in terms of falling stock markets and economic uncertainty and Trump would miss out on important gifts to voters in key swing states such as Iowa (agriculture) and Michigan (auto industry). The 2020 election campaign is increasingly gaining steam and Trump needs all the tailwind he can get from the economy and stock markets to go after re-election.”
“We cannot rule out the two sides failing to reach a deal in Washington next week but, in our view, this would be likely to trigger a big decline in stock markets, which would put pressure on the two sides to get back at the negotiating table and get the deal done.
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