Steve Brice, Standard Chartered Private Bank
Chief investment strategist
The US-China trade deal is very important. One of the major factors undermining global growth was increased trade uncertainty as it reduced the incentive for businesses to invest.
This should encourage investor risk appetite over the next three to six months, supporting equities, pushing development market bond yields modestly higher, while accelerating growth outside of the US and China should encourage flows out of the USD, allowing it to break out of its two-year uptrend.
The caveat to this outlook is the overbought nature of equity markets globally, alongside evidence of a reduction in market diversity, which suggests the risks of a short-term pullback (potentially around 5%-7%) are higher than normal.
Therefore, we cannot rule out buy-the-rumour, sell-the-fact behaviour in the coming days and weeks.