Should I Stay Or Should I Go Should I Stay Or Should I Go Should I Stay Or Should I Go

Should I Stay Or Should I Go

Macro 4 minutes to read

Summary:  If I go, there will be trouble
And if I stay it will be double

Trade sentiment is dominating the narrative and in the near-term markets will remain headline driven.

A roller-coaster of a day for Asian traders and particularly US futures amidst a barrage of chaotic trade headlines. Early in the session a strong risk-off tone ensued as an SCMP report hit the wires citing no progress had been made in deputy level trade talks pouring cold water on any hopes for meaningful progress and an interim deal. Sources also claimed China’s chief trade negotiator, Vice Premier Liu He, would be cutting his trip to Washington short and leaving Thursday after just one day of talks which soured risk sentiment further.

Almost as soon this news was digested US sources claimed trade talks would not be cut short and Liu He would be staying in Washington until Friday and that the SCMP report was not accurate. Then a separate Fox News report stated the talks would be cut short and Liu He would be leaving Washington on Thursday.

These headlines were then followed by reports of a possible currency pact and soon to be approved licenses allowing some US companies to supply goods to Huawei. All whilst equity indices oscillated in keeping with swinging risk sentiment. If anything, a lesson to avoid trading on unsubstantiated headlines.

Talk of a currency pact has once again raised hopes of the potential for a partial deal which has seen US futures recover losses and risk proxy currency, AUD, retrace earlier moves also. However, the tone is still very much one of caution despite the recovery of early losses.

As talks begin the ongoing vacillation of headlines will keep markets on edge and more noisy price action is all but guaranteed. Expect more wild swings across e-minis and AUDJPY. The risk of a breakdown in the trade talks still remains high.

On the Chinese side there appears to be appetite for an interim deal (perhaps because they will never succumb to the more hawkish US demands of a true reset) particularly given negotiators have upheld their travel to Washington against the backdrop of visa bans, blacklisting China’s tech champions and NBA clashes. However, any partial deal is unlikely to bring anything new to table, the concessions floated by China mirror those that were talked about earlier this year. They are minor in the grand scheme of things consisting largely of agricultural purchases and a currency pact. There is also the ongoing issue of rolling back/suspending tariff threats which has long been a key demand from Chinese side, without this the chances of an interim deal are slim.

Negotiations may make progress on these smaller issues but fundamentally the relationship has changed between the US and China. A partial/interim deal, IF it can be reached, will only provide temporary relief from long-term bilateral tensions. That means the interim deal will not be enough to reignite confidence and investment for businesses.

Comprehensive deal remains unlikely

We have always maintained that the tariffs and trade negotiations are just scratching the surface in a far deeper rift which is more akin to Cold War 2.0, and one that cannot be resolved in a “trade-deal”. This is a long-running economic conflict and battle for tech dominance and hegemony. China will continue their strategic push to become technologically advanced as the productivity gains required from advanced tech and AI and the like is required to propel china from middle income to high income country as they rotate from a low-end manufacturing and export driven economy towards domestic consumption and services drivers.


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992