The US/China relationship and global financial markets

With a lot of pessimism seemingly already priced in to China’s “risky” assets, we suspect any further thawing in US/China relations could give them a boost. But we think their longer-term outlook is less rosy. Meanwhile, we don’t think US/China tensions will have much bearing on global “safe” assets – despite China’s still-large holdings of them – which we think will rally regardless. 

In view of the wider interest we are also sending this Asset Allocation Update to clients of our Global Markets service.