Did Both Sides Just Blink?

U.S. and China agree to temporary tariff reduction

Highlights

• U.S. and China agree to temporary tariff reduction

• Risk-on sentiment returns with strong market performance

• "Uncertainty" remains prevalent in corporate earnings discussion

• German DAX hits all-time high, pushed by policy and political factors

Key Takeaways

• Trade Tensions Temporarily Eased: The big news overnight is that both China and the United States have engaged in a 90-day slashing of the punishingly high tariff rates on each other’s products — the U.S. side to 30% from 145% and the Chinese side to 10% from 125%. Adding to this “pause” is the intrigue of China’s move to add “purchasing agreements” to the talks. This goes far beyond any “détente” that investors were anticipating heading into the weekend.