Arjen van Dijkhuizen, the senior economist at ABN AMRO, notes that the results of the Trump-Xi meeting in Osaka were more or less as expected, although the easing of Huawei sanctions by the U.S. was a positive surprise.

• “For the Chinese economy, it does make quite a difference whether USD 250bn of exports to the US is levied by 25% (current reality) or more than double that amount (threat). So, despite all the damage done already through the trade conflict including through indirect effects, the agreed truce takes away some headwinds for the Chinese economy at least for now – with an imminent threat gone for the time being. That said, given the weakness of the latest incoming data (partly reflecting drags from the trade conflict) we will look for further confirmation before considering further changes to our forecasts.
• In the meantime, Caixin’s manufacturing PMI for June joined its NBS equivalent in June by falling back below the neutral 50-mark today – both indicators are now at 49.4.”