China: Welcome relief in a long race – Standard Chartered

💡 DMK Insight

The US-China trade truce is a short-term win, but traders should brace for a potential slowdown ahead. While the truce eases immediate tensions, Standard Chartered’s forecast of a 4.9% growth in 2025 hints at underlying weaknesses. The anticipated deflationary pressures could impact consumer spending and corporate earnings, leading to volatility in equities and commodities. Traders should keep an eye on how this plays out in the next few months, especially as we approach Q4 earnings season. If growth forecasts continue to decline, we might see a shift in market sentiment, particularly in sectors sensitive to trade dynamics like technology and manufacturing. Watch for key economic indicators, such as PMI and consumer confidence, which could signal shifts in market direction. On the flip side, if the truce leads to unexpected positive developments in trade relations, we could see a rally in risk assets. But for now, caution is warranted as the broader economic context suggests a bumpy road ahead.