The USA and China have lowered their mutual tariffs in the trade dispute, causing investors to breathe a sigh of relief. An agreement is to apply for an initial 90 days from Wednesday, and investors should keep an eye on fresh US inflation data in particular in the new trading week, which could promise monetary policy stimulus.
Breathe a sigh of relief in the tariff dispute - first agreements between the USA and China
"It's important to understand how quickly we were able to come to an agreement, which shows that the differences may not have been as great as we thought," said Jamieson Greer, U.S. Trade Representative.
According to media reports, US tariffs on Chinese imports would fall to 30 percent, down from 145 percent previously. Beijing's tariffs on US imports are set to fall from 125 percent to 10 percent, according to reports. Further details could be released today, Monday. It will also be interesting to see whether further deals can be reached with other important trading partners.
At the end of last week, an agreement between the USA and the UK had already given investors cause for optimism.
Focus on US inflation data on Tuesday - core inflation rate could pick up
From an economic calendar perspective, Tuesday should be particularly exciting with new US consumer price data (14:30). Economists expect price pressures in the world's largest economy to have risen by 2.4% last month (compared to the same month last year), the same rate as the month before. However, the core rate of inflation is expected to have risen by 0.3 percent compared to the previous month, after 0.1 percent in the same period last year.
Other important price data for the USA will be published on Thursday with producer prices (14:30). Investors should also keep an eye on retail sales at the same time.
In the afternoon (14:40), Fed Chairman Jerome Powell is also expected to give a speech, which should be noted.
Fresh consumer confidence figures from the University of Michigan will round off the trading week on Friday (16:00).
Dow Jones Industrial Average Index
Source: TradingView
