Swiss Asia Capital is not expecting any breakthrough in US-China trade talks until mid-term elections in America.

In an interview to CNBC-TV18's Manisha Gupta, Juerg Kiener, managing director and chief information officer, said, "If you look at the forecast we had about two months ago, which came out was that we would have two more interest rates increase this year. So, if you look at your Fed rate right now and you look at your two year rate, your 10 year rate, you actually see that between the two and the 10-year rate, there is 20 basis points. So two Fed rates will actually get you back to the two year to 10 year rate."

"If you look at the bond market – it has been rallying and basically telling you that the economy is probably not that strong, that actually the strong dollar has been rather hurtful to the economy and now we are going to get basically the structure where people will question how many more interest rates we really get to increase this five times 25 basis points 125 I don’t think so,” Kiener said.

Kiener further added,“Yes, but I think a lot of it is sentiment. So let us look at a trade and let us believe we basically charge 25 percent on $500 billion in trade, there will be the $125 billion costs to China on what the $17 trillion economy - that is not even one percent. That is 0.6 percent of cost of the economy. So, we are making a hell of a lot of noise about these trades and taxes and we all know taxes will be cost but it is not going to change the way that the economy in China is really happening what is much more important is sentiment and people who are re-thinking how the trade will look like on the back of that we are postponing actually capital investments. And in return what we see is governments are coming in and stepping up and supporting the economy to flattening it out. So the economy will grow. Maybe the sectors which are major beneficiaries will change a little bit but I don’t think we will hear there will be ease of a Chinese economy.”