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⚔️ East vs. West: no major progress is expected
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A strong argument for the autumn fall of the stock market remains the fear of a new round of the trade war. The presidents of the United States and China will hold talks today during the APEC forum – analysts will try to find at least weak signs of improvement in relations.
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It seems that Beijing's political reality matters much more to the United States than its economic reality.
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The last time a Chinese leader visited the United States was in 2017; the previous meeting between Xi and Biden took place a year ago in Bali, as part of the G20 summit, and its consequences were assessed extremely negatively by analysts. And given that next year elections will be held not only in the United States but also in Taiwan, this meeting may be Beijing’s last opportunity to make its case to the Biden administration before the upcoming political battles.
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The United States also plans to take the necessary steps to restore military ties – not only Beijing's Asian claims, but also the conflict in the Middle East are on the agenda.
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If, as a result of the meeting between Biden and Xi, an agreement is reached on the absence of further escalation of the trade war, in particular, China softens export controls on rare earth metals, then the United States will not impose new duties on Chinese cars and microchips, which will be positive for the American stock market.
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A joint press conference can be an indicator of successful negotiations, but if instead, we hear only short comments from the press services about «constructive and positive negotiations», then the market will get a little nervous and switch to other events. But Asian assets may take a few more trading sessions to react speculatively.
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Profits to y’all!