Trump has to keep upbeat on the ‘biggest deal ever’ with China

What trade agreement are the US and China? President Trump saw Friday the ‘biggest deal ever’ with China. “Us, but also China, needs an agreement, albeit in general terms, which will overshadow the series of business figures,” says macro economist Koen Bender (Mercury Asset Management) prior to the stock market week.

The AEX scores 7% after just one month. In the past week, the Amsterdam main index rose by 1.58% to 523.2 points. Helped by strong figures from heavyweight Shell (+ 4.6%), KPN rose 9% on takeover freaks and Heineken (+ 4.6%).

Financials reduced the result to reduced opportunities for an interest rate increase: ING lost 3.1%, ABN Amro 3.8% and ASR 2.3%. Striking is the drop in the German DAX in the same week: -0.9%.

Ten-year interest rates on Dutch government bonds declined in response to statements by the US central bank that appears to be more reluctant with interest rate hikes. Brent oil gained light during the week, gold 1.5%. The production of China goes from 5 to 18 February on a pilot. Preparations have been made for the celebration of the Year of the Pig. “China closes, but that does not apply to their leader Xi Jinping, he wants a trade agreement, the market is waiting for a date on which trade negotiations are being held,” says Bender.

The armistice ends in the trade dispute on 1 March. China has asked the American trade representative Lighthizer and the Minister of Finance Mnuchin to continue talking in Beijing in February.

“But President Trump will try to consult North Korea in the same period, he absolutely needs a success in the elections,” says the economist. “Xi Jinping can not afford a loss of face like Trump, maybe Trump, so there’s a deal, but investors need to pierce the text: it’s only in general terms, they’re in trouble, comes to intellectual property protection, like at Apple, the guarantees go into detail, this dilemma will determine the agenda in the coming period “, says Bender.

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