Flash | 11 May 2025 22:23:52 ET │ 9 pages China Economics The Likely Shape of US-China Phase 1.5 Deal – Quick Take on the Geneva Talks CITI'S TAKE The US and China held a 2-day long conversation in Switzerland. We see the progress as a potential Phase 1.5 deal, resolving the easy part of the trade talks between the two countries. The Fentanyl tariffs and escalatory tariffs could be rolled back, and China is likely to make concession in reversible areas. It is now more likely in our view that the effective t ...

Market Reaction - The White House may ease tariff policies, leading to a significant rise in U.S. stock markets, with the Dow Jones up 2.65%, gaining over 1000 points, the Nasdaq up 3.72%, and the S&P 500 up 2.95% [1][2] Technology Sector Performance - Major U.S. tech stocks saw substantial gains, with all seven tech giants rising over 3%, and Amazon increasing nearly 7% [2][3] Chinese Stocks Surge - Chinese stocks also experienced a strong rally, with the Nasdaq Golden Dragon China Index rising over 5%, and companies like Xiaomi, Pinduoduo, and Alibaba all gaining more than 5% [3][4] European Market Trends - European stock markets also posted significant gains, with France's CAC40 index up over 2%, Germany's DAX index up over 3%, and the European Stoxx 50 index up over 3% [5][6] Gold Market Adjustment - Gold prices continued to decline, with the main futures contract reported at $3287.7 per ounce, reflecting a daily drop of 3.85% [6] U.S.-China Trade Relations - President Trump indicated that U.S. tariffs on China could significantly decrease, stating that the current 145% tariffs are too high, and a deal could lead to reduced tariffs, though not to zero [8] - The U.S. Treasury Secretary mentioned that the current situation resembles a trade embargo, and a comprehensive agreement with China could be reached within two to three years [8] Global Debt Concerns - The IMF reported that global public debt levels are rising amid increasing economic uncertainty, with projections indicating that by 2025, global public debt could exceed 95% of GDP [9][10] - The report warns that in extreme scenarios, global public debt could reach 117% of GDP by 2027, marking the highest level since World War II [10]