SINGAPORE (March 29): Concerns about trade tensions seemed to ease early this week on news that China and US officials are negotiating ways to reduce trade imbalances. But investors should not break out the champagne just yet.
It is not so much the threat of a trade war that has put the market in risk-off mode. What has been more worrying is the difficulty of predicting what happens next.
“Markets are bad at pricing geopolitics and trade tensions,” says James Cheo, senior investment strategist at Bank of Singapore, in a report. “It is hard for markets to price and predict what China and the US would do. The uncertainty is whether the Chinese will retaliate further and how [US President Donald] Trump responds from there... (Click here to read the full story)