Latest US-China trade truce leaves investors none the wiser

The latest trade truce between China and the United States offered investors the hope of an eventual deal that the feuding superpowers can live with, though the possibility of another tariff flare-up remained a risk for markets.

- SAQIB IQBAL AHMED ANKUR BANERJEE

The muted market reaction told its own story, as US and Chinese officials ended two days of talks in London on Tuesday with pledges to revive an agreement struck last month in Geneva, and remove China’s export restrictions on rare earths — a sticking point in that deal.

The guarded welcome from currency and stock investors shows that while the meeting ended in a truce, markets had also hoped for more and the lack of details means uncertainty is likely to remain high.

The main positive takeaway was the talks indicated pragmatism on both sides, analysts said.

“This is positive news to the market. At least now there's a bottom line that neither side is willing to cross,” said Mark Dong, co-founder of Minority Asset Management in Hong Kong.

Chinese stocks rose to near three-week highs, while US stock futures were a touch lower. The US dollar edged higher and China’s yuan was steady.