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  • US Security Advisor, John Bolton, speaking after meetings in London says Sino/US meetings expected in September.  
  • Trade negotiators will probably identify sectors of UK – US trade deal they can make progress on.

In recent trade, there have been  some statements from  US Security Advisor, John Bolton  speaking after meetings in London mentioning trade talks between the UK and US and China.  

Bolton  says:

  • Did not talk about Hong Kong as part of general discussion about China. Says “we will continue to be in touch on it”.
  • Expecting Chinese delegation in September although Chinese have not said yes or no.
  • Told UK officials  he was happy to continue discussion with British technical experts on Huawei.
  • British officials stressed to him today there leaving the EU on October 31. They  are ready to go.
  • Is summarized with British officials the state of play in the US negotiations with China on trade
  • Trade negotiators will probably identify sectors of UK – US trade deal they can make progress on:  we are prepared to proceed as rapidly as the Brits are.
  • Believes that will be overwhelmingly bipartisan support in US Congress for a trade deal with Britain.
  • Told British officials the US looks forward to more extensive talks on Iran but understood priority is exiting EU on October 31.
  • Told British officials it might be better to defer talks on issues like Iran, China and Huawei until later.
  • Told UK officials were not here to pressure you on this…We want to be helpful on Brexit.

FX implications:

There has been no direct impact on  the market’s sentiment from these as they were repeats on much of what the markets have already priced in. We need confirmation on the US/Sino trade talks, especially, for September   – If there are confirmed meetings, then that should be risk-friendly, although nothing is to be expected in one fell swoop and uncertainties will continue to support currencies such as the CHF, JPY and possible NZD/CAD shorts when factoring in the central bank divergences between these two commodity currencies. This week will hopefully shed more light in the Bank of Canada’s stance since their last commentary that gave a neutral tone.