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US President Trump is cooling off optimism regarding the recent goodwill between the US and China over their ongoing trade negotiations. Markets hit the new week rallying after headlines broke that the two countries are abstaining from any further tariffs, but Trump is souring the rally quickly.

Key quotes

“Investors were cautious after U.S. President Donald Trump tempered optimism over progress made so far in trade talks between the world’s two largest economies.

Trump said on Tuesday he was not pleased with recent trade talks between the United States and China, souring the improved market sentiment following weekend comments from U.S. Treasury Secretary Steven Mnuchin that trade war is “on hold”.

His remarks followed Beijing’s announcement that it would cut import tariffs for automobiles and car parts.

Trump also floated a plan to fine ZTE Corp, and shake up its management as his administration considered rolling back more severe penalties.

“The market probably became overly optimistic on Monday. The reality is the talks are still continuing as they haven’t made headway on various issues, including intellectual properties,” said Norihiro Fujito, senior investment analyst at Mitsubishi UFJ Morgan Stanley Securities.

Further weighing on prices of risk assets, Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resistant to giving up his nuclear weapons.”