A U.S.–China trade agreement could be finalized as early as next week, according to U.S. Treasury Secretary Scott Bessent, speaking a day after President Donald Trump’s meeting with Chinese President Xi Jinping. Bessent said the “Kuala Lumpur agreement” was completed overnight and indicated both sides may exchange signatures within days.

For markets, a near-term signing would mark a material step toward de-escalation: cyclicals and emerging-market FX typically benefit when tariff uncertainty fades, while safe-haven demand for Treasuries and gold tends to ease. The durability of any risk-on move will hinge on the fine print—scope of tariff rollbacks, timelines, enforcement mechanisms, and treatment of sensitive sectors like semiconductors and critical minerals. Should timelines slip or enforcement remain vague, recent optimism could unwind quickly, putting the U.S. dollar and volatility back in demand.