Investing.com – This week markets are likely to welcome the ceasefire in the U.S.-China trade war, while awaiting fresh indications on the direction of U.S. monetary and an update on the health of the U.S. labor market.
The U.S. agreed not to increase the 10% tariffs on $200 billion worth of Chinese imports on Jan. 1 following talks between U.S. President Donald Trump and his Chinese counterpart Xi Jinping over the weekend.
The two sides will engage in new trade negotiations with the goal of reaching an agreement within 90 days. If no new agreement is reached in this time the 10% tariffs will be raised to 25%.
The trade spat between the world’s two largest economies has unnerved global financial markets and acted as a drag on global growth.
Federal Reserve Chairman Jerome Powell is due to testify about the economic outlook to Congress on Wednesday. Last week, Powell said interest rates were “just below” the neutral level, which markets took as an indication that the Fed could slow its program of hiking interest rates.