Markets rally on US-China trade war ceasefire but comprehensive agreement seems “impossible”

Markets rose on Monday following the agreement over the weekend by the US and China on a ceasefire in their trade war.

The S&P 500 rose 1.1 percent, the STOXX Europe 600 rose 1.0 percent and the Nikkei 225 rose 1.0 percent.

Oil surged, with both West Texas Intermediate crude and Brent crude jumping about 4 percent.

Some analysts remain wary of a resumption of the trade war.

“Reaching a comprehensive agreement on all the outstanding issues in 90 days seems, essentially, impossible,” Nomura analysts wrote of the deadline set for a permanent resolution.

“Who knows, President Xi and the Chinese authorities may pull a rabbit out of the hat through this new negotiating period and promote enough belief that the U.S. trade representatives permanently leave the tariffs on the $200 billion at 10%, but that is a big if,” said Chris Weston, head of research at currency broker Pepperstone, in a note.