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A “phase one” trade deal between the United States and China, announced Friday, has cleared the path for riskier assets to rally through the end of the year.
But investors are still digesting what is and isn’t included in the deal, which lowers the temperature after a fraught year and a half but leaves markets in the dark on what comes next.
“The [’phase one’] trade deal is positive for the outlook relative to continued trade war escalation, but there is still a lot of uncertainty,” Jim O’Sullivan, chief US macro strategist at TD Securities, said in a note to clients.
The deal still needs to go through a legal review and translation process before it’s signed. But here’s what it includes, according to US officials and others familiar with the agreement:
- The United States canceled an additional round of tariffs on nearly $160 billion of Chinese consumer electronics and toys which had been set to take effect Sunday.
- China has agreed to increase purchases of US goods and services by at least $200 billion over the next tw