US-CHINA: Xi-Trump Call Takes Place 'At Latter's Request'

Jun-05 13:07

(MNI) London - China's state-run Xinhua has confirmed that President Xi Jinping has held a call with US President Donald Trump. For some time, there has been speculation as to when a call might take place. 

  • On 4 June, Trump posted on Truth Social 'I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!". Xinhua says the call 'took place at the latter's request.'
  • Xinhua: "The leaders engaged in discussions, reflecting ongoing diplomatic tensions amidst tensions."
  • Politico noted on 3 June that a person familiar with the US-China trade talks "said the [US] administration is under “a lot of pressure” because of China’s block on critical minerals, crucial components for everything from auto and electronics manufacturing to munitions production. “I don’t think Xi is too interested in exporting any more rare earths or magnets to the United States, he’s made his position clear,”
  • Momentum on reaching an agreement has stalled following the initial meeting in Switzerland in May. On 30 May, Trump said China had "totally violated its agreement with us". Afterwards, the Chinese gov't called on the US to "immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva".
  • US Secretary of the Treasury Scott Bessent said around the same time that talks are "a bit stalled", and "this is going to require both leaders to weigh in with each other,”

Historical bullets

MNI: US REDBOOK: APR STORE SALES +6.7% V YR AGO MO

May-06 12:55
  • MNI: US REDBOOK: APR STORE SALES +6.7% V YR AGO MO
  • US REDBOOK: STORE SALES +6.9% WK ENDED MAY 03 V YR AGO WK

EQUITIES: Estoxx put spread

May-06 12:53

SX5E (17th Apr) 3500/3400ps, bought for 5 in 5k.

STIR: TD Securities Recommend Paying EUR 1y1y vs. GBP 1y1y/USD 1y1y.

May-06 12:50

TD Securities see “more room for USD front-end outperformance on a cross-market basis”.

  • They believe that the expected “inflation bump in both the U.S. (H2) and UK (Q3) will be temporary supply- rather than demand-driven.”
  • TD also highlight that “even though the UK's growth dynamics are closer to the Euro area, it still has a stronger beta to U.S. markets”
  • Meanwhile, they expect “the ECB to ease to 1.5% or lower only if global conditions worsen. In that scenario again, it’s more like that the U.S. (or GBP) front-end still outperforms vs. EUR”.
  • As a result, they recommended paying EUR 1y1y vs. GBP 1y1y/USD 1y1y.