China–U.S. Trade Progress Boosts Global Risk Appetite, Says Danske Bank Analyst

Market sentiment expected to improve further as trade war de-escalation fuels optimismPositive developments from the China–U.S. trade negotiations are driving a continued improvement in global market risk appetite, according to Danske Bank.In an interview with TechFlow, Anderson, Co-Head of Fixed Income and FX Research at Danske Bank, stated that the easing geopolitical tensions are expected to sustain the risk-on sentiment seen in markets over the past week.Key Points:Market risk sentiment improved last week and is likely to continue risingProgress in U.S.–China trade talks is the primary driver of optimismU.S. Treasury Secretary Benson described the discussions as “productive”More details on the trade agreement to be released MondayDanske Bank: Trade Optimism Lifts Global Market MoodAnderson noted that the financial markets have been buoyed by early signs of trade war de-escalation, which began to emerge last week and gained momentum over the weekend.“Risk appetite is gradually returning, and this trend is likely to extend through the week if no new negative developments occur,” he said.This recovery follows intense trade talks in Geneva, where U.S. and Chinese officials reportedly reached a framework agreement to reduce tariffs and improve economic cooperation.U.S. Treasury Confirms Productive NegotiationsU.S. Treasury Secretary Scott Benson echoed the sentiment, stating that the weekend's bilateral talks were "productive" and hinted that official details will be published Monday, adding further confidence to the markets.Analysts expect the agreement to positively influence equity markets, commodities, and risk-sensitive assets such as cryptocurrencies.