The United States and China have agreed to trade talks amid an escalating trade war between the two superpowers.

According to a statement released by China, the discussions will resume in “early October” bringing some relief to the markets.

But AMP Capital chief economist Shane Oliver tells John Stanley he is cautiously optimistic.

“It is good news but the only problem, of course, is that we have seen this will now be the fourth attempt to get negotiations going again in the last 18 months.

“I guess one could be a little cautious going into this, but it’s certainly good news.”

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