Morgan Stanley's analysis of Trump - Xi meeting: a pause that refreshes, lower tensions, market rally, but it is a set-up to sell risk
:...So as we enter this week, there seems good reason to expect that the G20 will result in a tariff ‘pause’, affording both sides a defined period of time to get negotiations back on track before resorting to further tariff escalation.
But investors beware: while a pause is better than escalation, it won’t refresh the economy enough to forestall a challenging path for risk assets. A pause, particularly one that comes without preconditions and follows a period of heated rhetoric, would be positive, signalling that both sides want to avoid further economic damage. If it coincides with Fed dovishness, a pause could boost investor sentiment and risk asset prices in the short term. However, we’d view this more as a set-up to sell risk than a catalyst to turn more bullish. Consider the following:
https://www.zerohedg...g-set-sell-risk