Bessent with positive references to talks with the EU and China 💡

US Treasury Secretary Bessent’s recent remarks signal a positive shift in global economic relations, particularly regarding China and the EU. Bessent emphasized the US does not seek decoupling from China, but rather aims for supply chain de-risking. This distinction reassures investors who have been wary of a return to major global trade tensions and supply chain disruptions.

Bessent’s comments that the US is “back on track” with China negotiations and is "in a good place" to discuss larger, structural issues have improved market sentiment. Investors interpret this as an indication that the world’s two largest economies are moving towards greater stability and cooperation—reducing the risk of trade wars or tariffs that could hamper growth.

Further, Bessent acknowledged improving talks with the EU, suggesting diplomatic ties and trade discussions are progressing more smoothly than before. Her recognition of Japan’s “innovative” approach to economic matters and questions of achieving key targets (like 15% trade thresholds) also points to a collaborative, solutions-focused global environment.

Market sentiment, as a result, has turned cautiously optimistic. Equities and risk assets are seen as benefiting from these signals of de-escalation and proactive engagement. Safe havens like Treasuries saw subdued demand, while sectors exposed to global trade like technology, manufacturing, and materials saw renewed interest as the risk of forced decoupling or sudden policy shocks recedes. The tone set by Bessent supports the narrative of a stabilized, more predictable landscape for global commerce and investment. Source: xStation