Forex News Markets Rally on Trade War Ceasefire Markets Rally on Trade War Ceasefire Monday, 3 December 2018 9:18 Share 0 Tweet 0 Pin it 0 +1 Asian stocks traded higher and U.S. stock futures also rallied after the announcement of a 90-day ceasefire in the trade war between the United States and China. The Shenzhen Composite surged 3.37 percent as of 1:37 p.m. HK/SIN while the Shanghai Composite jumped 2.70 percent. South Korea’s Kospi was 1.64 percent higher, Australia’s ASX 200 was 1.84 percent higher and Hong Kong’s Hang Seng Index was lifted 2.18 percent. The S&P 500 is expected to open around 1.7 percent higher and the Nasdaq is expected to open up over 2 percent. Despite the renewed trader optimism and the buying spree that ensued, analysts are concerned that the new ceasefire is not a real truce and that additional tensions may ensue after the 90-day ceasefire. According to the terms of the agreement, both sides have agreed to stop the implementation of further tariffs for the next 90 days, though the existing tariffs remain in place. If the leaders are unable to reach a new trade deal within the next 90 days, it is likely that new tariffs will come into effect. The ceasefire was formalized at a meeting between U.S. President Donald Trump and Chinese President Xi Jinping, who met over the weekend at the G-20 summit in Argentina. President Trump announced that in addition to the ceasefire, China has agreed to “reduce and remove” tariffs on U.S. cars coming into China, which is now set at 40 percent. He did not specify the new level for the automobile tariffs. Oil Prices Bounce Oil prices surged on Monday in the hopes that the renewed trade caused by lower tariffs would boost the global economy. U.S. WTI futures were up 5.28 percent to $53.62 per barrel while Brent crude futures enjoyed a 4.79 percent upswing to $62.31 per barrel. The gains come after oil posted its weakest month in more than a decade in November, easing over 20 percent as global supply overshadowed weaker demand. Traders are now looking towards the OPEC meeting this Thursday where the world’s biggest oil producers are expected to announce whether they will be cutting production in order to keep prices stable. Sara Patterson Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.