Instant View: US-China agree to cut tariffs, 90-day pause

LONDON/SHANGHAI (Reuters) - Stocks and the dollar rallied connected Monday aft the United States and China said they had agreed connected a 90-day intermission connected tariffs and reciprocal duties would driblet sharply, giving investors immoderate assurance that a full-scale commercialized warfare whitethorn person been averted.

U.S. Treasury Secretary Scott Bessent, speaking aft talks with Chinese officials successful Geneva, told reporters the 2 sides had reached the woody that was outlined successful a associated connection and that reciprocal rates would driblet by 115 percent points.

This weekend's Geneva meetings were the archetypal face-to-face interactions betwixt elder U.S. and Chinese economical officials since U.S. President Donald Trump returned to powerfulness and launched a planetary tariff blitz, imposing peculiarly hefty duties connected China.

MARKET REACTION:

STOCKS: Futures connected the S&P 500 and Nasdaq jumped to commercialized up 2.8% and 3.6%, respectively, from gains of 1.5-2% previously, portion successful Europe, the STOXX 600 roseate 1% successful aboriginal trading.

FOREX: The dollar extended gains, with the euro down 0.8% astatine $1.1164, having traded down 0.2% connected the time earlier, portion the yen weakened, leaving the U.S. currency up 1.1% astatine 146.945, from a 0.5% summation earlier.

BONDS: Benchmark 10-year U.S. Treasury yields edged up 6 ground points connected the time to 4.435%, having traded up 5 bps earlier the associated statement.

COMMENTS:

KENNETH BROUX, SENIOR STRATEGIST FX AND RATES, SOCIETE GENERALE, LONDON

"There is simply a de-escalation betwixt China and US resulting successful a simplification of tariff connected Chinese goods to 30% and Chinese tariffs connected US goods to 10%. It's a wide ballot by the marketplace successful favour of riskier assets. It's a measurement successful the close absorption and a affirmative of U.S. assets and U.S. economy."

"The dollar was lagging different markets successful the betterment from the April lows. We had equities up backmost to April 2nd levels, we had enslaved yields up to those levels and the dollar was really lagging that move. Now the conditions are falling into spot for a deeper accommodation and a bigger betterment of the dollar to drawback up with equities and enslaved yields."

ZHIWEI ZHANG, CHIEF ECONOMIST, PINPOINT ASSET MANAGEMENT, HONG KONG

"This is amended than I expected. I thought tariffs would beryllium chopped to determination astir 50% and this is overmuch lower. Obviously, this is precise affirmative quality for economies successful some countries and for the planetary economy, and makes investors overmuch little acrophobic astir the harm to planetary proviso chains successful the abbreviated term.

But we besides request to support successful caput this is lone a three-month impermanent simplification of tariffs. So this is the opening of a agelong process. The 2 sides volition walk months probably, to travel up with a resolution, oregon scope a last commercialized deal, but this is simply a precise bully starting point."

ARNE PETIMEZAS, DIRECTOR RESEARCH, AFS GROUP, AMSTERDAM

"Such a crisp U-turn by the US connected tariffs connected a Monday greeting is rather the surprise. It seems that tariffs connected China volition autumn to manageable levels, albeit temporary. Markets should rally connected this. How tin Trump credibly rise tariffs erstwhile the 90-day intermission ends? He has toned down his tariffs faster than anyone thought helium could, and April 2 volition soon beryllium forgotten. Granted, helium told you to bargain the dip."

WILLIAM XIN,CHAIRMAN OF HEDGE FUND SPRING MOUNTAIN PU JIANG INVESTMENT MANAGEMENT, SHANGHAI

"The effect acold exceeds marketplace expectations. Previously, the anticipation was conscionable that the 2 sides tin beryllium down to talk, and the marketplace had been precise fragile. Now, there's much certainty. Both China stocks and the yuan volition beryllium successful an upswing for a while."

(Reporting by Reuters Markets Breaking News team; Compiled by Amanda Cooper; Editing by Vidya Ranganathan)