US - China tension falls, Japanese Economy Struggles

US - China tension falls, Japanese Economy Struggles

Today’s events:

15:30 GMT+2 - Empire State Manufacturing Index

15:30 GMT+2 - PPI m/m

Tention falls

Before Joe Biden sat face-to-face with Xi Jinping on Monday night at a seaside resort in Bali, US officials played down hopes for tangible progress. The outcome easily exceeded those low expectations.

At the end of a meeting that ran about three hours, the US said the two sides would resume cooperation on issues including climate change and food security. Chinese Foreign Minister Wang Yi called it a “new starting point,” saying the meeting went longer than planned. Both sides “hope to stop the tumbling of bilateral ties and to stabilize the relationship,” he said in a briefing with state-run media. 

Just four months ago, tensions between the US and China reached the highest point in years as House Speaker Nancy Pelosi flew into Taiwan. As a result, before the 20th Congress of the Chinese Communist Party, the US authorities announced a ban on the supply of high-tech technologies to China to slow down the development of advanced industries in the country.

A positive meeting outcome between the two leaders could positively impact US and Chinese tech stocks. US100 has formed a double bottom pattern on the daily timeframe with the target at 12 200. 

US100Daily.png

Other news worth mentioning:

  • FedEx to send employees in select US markets on unpaid leave as current business conditions reduce traffic volumes.
  • JPMorgan cuts its forecast for China's GDP growth in 2022 to 2.9% (from 3.1% earlier).
  • Bank of America November Poll: 72% (a record percentage) of global money managers believe the USD is currently overvalued.
  • Villeroy (ECB) stated the Central Bank will continue to raise rates but may slow down the rate of increase.
  • Australia meeting minutes: The Central Bank of Australia does not rule out a slowdown in the pace of rate hikes to a step of 0.5%. The Central Bank of Australia might take a pause in raising rates.
  • Japan's economy enters recession as the country's GDP falls for the first time in four quarters. GDP growth decreases by 0.3% q/q and 1.2% y/y against the 1.1% growth forecast. The fall was caused by the rise in the cost of imports due to rising energy costs.

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