A pivotal agreement between the US and China is expected to dominate the market agenda when trading resumes on Monday, igniting a wave of optimism and volatility across equities, currencies and commodities.
The news follows confirmation that both countries have finalized the framework for a long-awaited trade deal, which is an event investors see as a turning point after months of escalating tension.
The announcement comes just a week after global financial advisory giant deVere Group described intensifying US–China competition as the “new global arms race.”
The latest developments mark a striking shift in tone, transforming what had been an increasingly hostile stand-off into a pragmatic moment of cooperation.
Nigel Green, CEO of deVere Group, says: “This is typically the kind of market catalyst that moves everything at once. The tone of risk has changed dramatically.”
Under the new framework, Washington and Beijing have agreed to halt the imposition of new tariffs, with the US confirming it will not proceed with the threatened 100% levy on Chinese imports.
China, meanwhile, will suspend its tightened restrictions on exports of rare earth minerals—resources critical to manufacturing, defence technology and clean-energy infrastructure—and resume large-scale soybean purchases from the US.
The deal also finalises a long-disputed settlement over TikTok’s American operations, ensuring a structure acceptable to both sides.
Nigel Green says: “This framework represents an inflection point for the global economy. For months, supply chains have been held hostage to uncertainty.
“Now, manufacturers and markets have a path forward. The ripple effects will be felt—from semiconductors and shipping to commodities and emerging-market debt.”
Markets in Asia are poised to rally first, with futures in Seoul, Shanghai and Singapore already showing signs of anticipation.
Analysts expect risk-sensitive currencies such as the Australian dollar and South Korean won to strengthen, while copper and oil prices could gain on renewed confidence in trade volumes.
“The reopening of dialogue between the world’s two largest economies will energize equity markets,” Nigel Green continues.
“Investors are likely to rotate back into cyclicals—industrials, materials, logistics and tech hardware. The sentiment swing could also lift global growth forecasts for the first time this quarter.”
The deal carries broad macroeconomic implications. Supply-chain bottlenecks that contributed to persistent inflation pressures may begin to ease if restrictions on rare earth exports are indeed delayed.
“This isn’t just a trade story, it’s a monetary one,” he explains. “If goods start moving more freely, inflation expectations will soften, and central banks will have more flexibility to sustain growth. The market could begin pricing in earlier rate stability.”
Yet the deVere CEO cautions that while the tone has improved, the rivalry is far from over. “This truce is tactical,” he says.
“It’s a recognition that escalation was damaging both economies.
“But the competition, including technological, geopolitical, and financial, continues. The new global arms race isn’t suspended; it’s shifting into a different arena. Investors shouldn’t mistake calm for complacency.”
The impact will also extend to commodities and digital assets. Improved trade flows could lift industrial metals and emerging-market equities, while a softer dollar may support alternative stores of value, such as gold and Bitcoin.
“Capital moves on expectation,” says the deVere chief executive. “If markets sense that the worst is behind us, we’ll see renewed flows into risk assets, and digital assets could benefit from that broader optimism.”
Nigel Green concludes: “Investors will be watching Monday’s open as the first real test of sentiment, but the direction of travel is unmistakable.
“The cycle of tariff escalation appears to be over, and the world’s two largest economies are once again talking growth instead of retaliation. This is enough to reawaken animal spirits globally.”
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