As it turns out, we don’t have to wait until Thursday for a “message” about what was discussed this week in Beijing when a mid-level US delegation met with Chinese officials to talk trade.
The USTR issued what I guess counts as a “readout” from the meetings and it contains exactly nothing new. It is, plain and simple, a wholesale rehashing of the same talking points and could just as easily have been issued after the G20 “truce” last month.
If there’s anything at all notable about the statement, it’s that it predictably couches things in terms that fault China for everything. In other words, it implicitly paints Beijing as the antagonist and therefore the responsible party if you’re looking to assign blame for this ongoing debacle which has played a major role in crashing markets from New York to Hong Kong and is now clouding the outlook for growth by throwing the future of global trade and commerce into doubt.
Here is the statement in all its non-glory:
You couldn’t have conjured something more underwhelming if you tried and it looks like markets are less than impressed as equities came of the highs when the minimal soundbites starting hitting the tape.
As noted first thing Wednesday morning, the recent V-shaped recovery in risk assets looks overdone in the same way the December hand-wringing seemed overwrought.
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If Trump is really concerned about rescuing markets by way of convincing everyone that a comprehensive trade deal with Beijing is in the works, he’s going to have to do better than this.
Additionally, we would note that the tone of the statement isn’t likely to go over particularly well with Beijing at the margin.
OK then……Fed dovish but Trade deal a maybe….risk off?