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Analysts react to US-China trade agreement
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Analysts react to US-China trade agreement
Jun 10, 2025 5:28 PM

SINGAPORE (Reuters) -U.S. Commerce Secretary Howard Lutnick said that a trade framework and implementation plan agreed with China in London should result in restrictions on rare earths and magnets being resolved.

China's Vice Commerce Minister Li Chenggang said earlier the two teams had agreed on implementing their Geneva consensus and would take the agreed framework back to their leaders.

QUOTES:

CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE, MELBOURNE:

"The devil will be in the details but the lack of reaction suggests this outcome fully expected.

"While clearly a positive outcome, the lack of reaction in S&P500 futures, and the incremental moves seen in CNH or AUD, suggests achieving the framework on the Geneva agreement was fully expected - the details matter, especially around the degree of rare earths bound for the US, and the subsequent freedom for US produced chips to head East, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported.

"The reaction in Chinese equities could be telling and I suspect US equity futures will track developments here closely today."

CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:

"I think in this environment... any hints on progress on a potential trade agreement will be positive for markets. Even though details are scant, as long as the two sides are talking, I think markets will be happy.

"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement. That sort of comprehensive deal usually takes years to be reached, so I'm skeptical that a framework reached at the meeting in London will be comprehensive. Tensions might be de-escalated for now, but they will certainly escalate again in coming months."

RAY ATTRILL, HEAD OF FX STRATEGY AT NATIONAL AUSTRALIA BANK, SYDNEY:

"The devil is going to be in the details of what is, as I say, no more than a handshake agreement and importantly, whether this can help to re-establish trust between President Xi and President Trump, which has clearly been broken since the Geneva Agreement was published. But it's way too early to say that we know we're in the midst of establishing a cast iron, new US-China trade agreement.

"The whole year has been littered with positive omens about reaching agreements and then we haven't really seen substantial progress or we've seen backsliding on things that were seemingly agreed so.

"Our view is still that whatever does get agreed in the coming weeks and months, the baseline view is that we're going to end up with a global tariff situation which is far worse than existed prior to Trump's ascent to the presidency so we're still going to have a tariff environment we believe will be detrimental as far as global growth is concerned."

TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY:

"If we keep the terms of the Geneva Agreement, we're looking at US tariffs on Chinese goods staying at 30% for a period of time and Chinese tariffs on US goods at 10%. So that's down from 145% and 125% respectively. That would be fantastic.

"Now that for me was probably the market consensus...and now people just trying to work out whether they're gonna buy or sell the US dollar and that's I think reflecting a bit of that indecision.

"I thought extension of Geneva and that appears to be what we're getting. That's why U.S. equity markets are holding at this point of time. I still feel like they're overcooked and they need to pull back. It's just been a remarkable run and we're sort of pushing up now against the record highs from February, so for me, it would make sense for them to take a breather. As I said, it hasn't exceeded expectations, it's not below expectations. It's right where I thought we might land and that's why I think now there's a little bit of indecision in US equity futures."

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