China-US Post-Election Talks Support FXI, MCHI

For investors, the signal is supportive for China-linked assets that have been heavily punished by policy uncertainty. The iShares China Large-Cap ETF, FXI, closed at 34.95 on Nov. 6, just above its 50-day moving average of 34.05 but still below its 200-day average of 35.40, while the MSCI China ETF, MCHI, ended at 51.89, also modestly above its 50-day average of 52.02 but under its 200-day line of 55.25.

The market reaction has been cautious rather than euphoric. FXI’s relative strength index rose to 67.8, a sign of improving momentum, while MCHI’s RSI stood at 58.6. Both funds have recovered from earlier October weakness, but they remain below longer-term trend levels, suggesting traders want more than rhetoric before re-rating China exposure.

Energy and credit markets are also watching for any easing in geopolitical friction. U.S. crude ETF USO held at 148.41 on Nov. 6, far above its 50-day average of 152.22 and 200-day average of 125.96, after a volatile stretch that underscored how quickly oil can react to shifts in Middle East and China-U.S. tensions. High-yield credit stress, tracked by the Bank of America Merrill Lynch US High Yield Index option-adjusted spread, was 3.405 percentage points, still elevated enough to show investors are not pricing a benign global backdrop.

Adalytica’s U.S.–China relations sentiment gauge sits at 57, in neutral territory, after a sharp one-day drop, while its China CCP policy direction gauge remains at 68, also neutral. That points to a market that sees room for engagement but not a durable thaw.

The key question now is whether post-election diplomacy translates into concrete moves on tariffs, technology curbs and investment restrictions. If it does, Chinese equities, industrials and multinationals with heavy China exposure could get a relief bid; if it does not, the market is likely to treat the announcement as another temporary ceasefire in a relationship defined by recurring escalation.