#USChinaTradeTalks US-China trade talks are underway in London, with representatives from the two largest economies aiming to ease trade tensions. The talks come at a crucial time, as China grapples with deflation and trade uncertainty dampens sentiment among US businesses and consumers.

*Key Developments:*

- *Trade Negotiations*: US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer are representing the US, while Vice Premier He Lifeng leads the Chinese delegation.

- *Market Impact*: The dollar has slipped against major currencies, with the USD/JPY pair retreating to 144.00, as investors await outcomes from the trade talks.

- *Economic Context*: China's export growth slowed to a three-month low in May, while factory-gate deflation deepened to its worst level in two years.

- *Investor Sentiment*: Market optimism has eased, with investors growing cautious ahead of the trade talks and awaiting further economic data, including the US CPI release on Wednesday ¹ ².

*Potential Outcomes:*

- *Easing Trade Tensions*: A successful agreement could boost market sentiment and ease trade tensions, potentially strengthening the US dollar and Chinese yuan.

- *Continued Uncertainty*: Failure to reach an agreement could perpetuate trade uncertainty, dampening economic growth and impacting global markets ¹.