Equities yoyo of US and China trade related headlines

Published date: 10/10/2019

Although the US cash markets closed in the green the futures markets sold off last night after a story emerged that the China-US trade talks had stalled. This news also came after it had emerged that China would be leaving the trade talks early but everyone insisted that this was a logistical issue and nothing to do with how the talks are going. Bourses in the Asia Pac area shrugged off the woes and the Nikkei 225 closed 0.45% higher, while the ASX trades flat and the Shanghai Comp. moves 0.71% to the good. The talks are still on for today so expect some more volatility.

The FOMC minutes revealed some Fed policymakers argued for keeping rates steady, suggesting it is better to hold back until there is a real need to provide accommodation. The markets are still pricing in a 25bps cut for the next meeting but it still important to watch incoming data.

After pushing higher yesterday gold has now retreated back to where it started. The precious metal is now trading flat at $1505/oz after the risk mood turned once again overnight.

Copper has also moved higher this has all come about after Trump has given some concessions on sales to Huawei. This move is seen as a sign of progress on the negotiations and a good step forward.

DoE's yesterday recorded another build and this sent WTI further down once again. This morning spot WTI trades at $52.28/bbl and has moved -0.42% lower overnight.

Today the main thing we are looking out for is progress on the trade talks. On the data front, we have UK GDP, UK manufacturing and industrial production, UK trade balance, US core CPI, OPEC monthly report and comments from BoE's Carney, Fed's Mester and Kashkari.


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