Analysts at Danske Bank note that after some conflicting reports, both China and the U.S. officially confirmed the landing of a phase one deal and more details of the agreement came to light.

• “China has committed to buy at least USD40bn of US agricultural goods annually, to tighten protection for US intellectual property, to ban forced technology transfers from US companies and to refrain from competitive devaluations. In return, the US canceled the planned tariff hike this Sunday and agreed to cut tariffs on USD120bn of Chinese imports that were introduced in September to 7.5% from 15% (tariffs of 25% on some USD250bn of Chinese imports remain in place).
• It is expected that the agreement will be signed in January before talks about the more thorny issues will start in a phase two deal. Although a bumpy road still lies ahead, we think the worst of the trade war probably lies behind us.
• Markets cheered the switch from escalation to de-escalation on the trade front and the removal of two prominent downside risks to the global economy led to a clear performance across cyclical currencies in DM and EM space. This morning, the People's Bank of China set its daily reference rate for the yuan at the strongest level since early August.”