Global risk sentiment likely to recover next week after 9th round of US-China trade talks set to kick-start on April 3, says Scotiabank

Global risk sentiment will likely recover next week particularly after the 9th round of US-China trade talks that is set to kick off on April 3, propping up EM Asian currencies, according to the latest research report from Scotiabank.

China’s factory activity is likely to pick up in March on the back of stimulus measures rolled-out after months of slowdown, leading other major economies in the world. The NBS is due to release the official manufacturing PMI at 9:00am HKT on Sunday.

The 2-5Y CNY ND IRS curve will likely re-steepen in the months ahead. Chinese Premier Li Keqiang said at the Boao Forum for Asia on Thursday that "For the economic slowdown, China has already formulated relevant countermeasures.

Since the beginning of this year, China’s economy has been steady and there have been some positive changes." While remaining upbeat about the Chinese economy, Premier Li also promised further relaxation of foreign investment rules.

In addition, Reuters on Wednesday cited US officials as saying that the US and China have made progress in all areas under discussion in trade talks, with unprecedented movement on the touchy issue of forced technology transfers, but sticking points remain.

Zhang Yansheng, senior research fellow with the academic committee of the NDRC, said at the Boao forum on Wednesday that China and the US should reach a trade deal in the near future, but conflict between the world’s two largest economies may last many years.

According to the Ministry of Commerce of China, the US trade delegation arrived in Beijing later yesterday afternoon and the two sides held a working dinner in the evening with a full day of talks planned for Friday.