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The White House Economic Adviser Larry Kudlow recently crossed wires, via CNBC, while turning down any tariff reduction on Chinese goods from the United States (US) side until the phase one deal gets finalized. Mr. Kudlow also refrained from giving any timeline on the deal.

Key quotes

“Would not put a timeline on China trade deal. Close means close.”

“Trump believes China needed deal more than US.”

“Made a lot of progress on currency stability and  IP theft.”

“Made progress on  agriculture.”

“We’ve had a very unfair relationship with China through the years so the deal has to be good for the US and US workers.”

“No tariff adjustments until China deal has been finalized.’

“Does not believe that US needs negative rates as economy is in a good place now.”

“the yield curve is normalizing which he believes is a good thing.”

“Trump has asked him to explore tax cuts 2.0.”

“New tax policy will be released for many months.”

FX implications

Although markets showed less response to the news, this could be considered as an additional burden for riskier assets, Commodities and Antipodeans while also favoring the safe-havens.