A US-China trade war deal, coupled with central bank monetary policy easing, could buck global slowdown predictions

With many major central banks around the world either cutting interest rates or adopting a more dovish tone, and with economic uncertainties, deriving from the US-China trade war, affecting the whole world, markets could be forgiven for being somewhat downbeat. However, that might prove a costly mistake. 

Admittedly, institutions such as the International Monetary Fund and the Organisation for Economic Cooperation and Development have downgraded their global growth estimates for 2019, seeking to factor in the consequences of the trade war.

But there is every possibility that some level of agreement between Beijing and Washington on trade issues is now within reach. Prior assumptions about global economic prospects might have to be revisited.

As regards a “phase one” deal, the mood music emanating from both US and Chinese negotiators has been somewhat more upbeat. “We’re pretty comfortable that the phase one is in good shape,” US Commerce Secretary Wilbur Ross told Fox Business Network on November 1.