From what we understand, Xi then conveyed a message to Trump that Pyongyang believes the stability of the Korean peninsula now depends on US actions. If the US were to continue to refrain from conducting joint military exercises with its allies, as it has for the duration of the Olympic games, the DPRK would not fire ICBMs or conduct nuclear tests beyond the duration of the Olympics as well.
Xi expressed China’s support for such an agreement, and held out hopes that officials from the US and the DPRK would engage in direct dialogue at the Olympics in Pyeongchang, leading to a resumption of bilateral discussions between the two countries as well a resumption of the Six-Party Talks.
Beijing, from what we understand, will furthermore seek to build on the new-found rapprochement between North and South Korea to organize a summit in the not too distant future between Kim Jong-Un and South Korea’s President, Moon Jae-in, who Xi Jinping has been actively courting.
BFW 03/09 00:14 *CHUNG SAYS TRUMP, NORTH KOREA'S KIM WILL MEET BY MAY
BFW 03/09 00:12 *CHUNG SAYS NORTH KOREA WILL REFRAIN FURTHER MISSILE TESTS
Hopes for North Korea nuclear accord lift sentiment
Agreement for talks with the south helps extend risk rally and boost the won
North and South Korea have agreed to hold direct talks between their leaders with Pyongyang signaling it is willing to abandon its nuclear programme if its security can be guaranteed.
The won is gaining 1 per cent at Won1,065.94 per dollar, its strongest level in 11 sessions.
The dollar index is slipping by 0.4 per cent to 89.726 and the euro is up 0.5 per cent at $1.2398, with the pound 0.4 per cent higher at $1.3889 The dollar tends to face selling pressure on positive geopolitical news, since its status as the world’s reserve currency gives it lingering haven characteristics.
Similarly, investors are reducing their exposure to US government debt, drawn by the prospect of stronger returns elsewhere, sending the yield on 10-year Treasuries back to 2.9 per cent for the first time in four sessions and up by 2.2 basis points. The yield was lower by a similar margin before the Korea news broke.
According to futures trade, New York’s S&P 500 will rise 0.5 per cent at Tuesday’s open, adding to a climb of over 1 per cent on Monday.